This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.
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Be sure to wish grim a happy birthday on Sunday!
Frist – H B’day in adv.
Where Homes Are Selling Fastest
Even in the fastest-selling Zip Codes in the country, that trend is repeated over and over again. Nothing is selling as fast as it once did as buyers hold off, waiting for prices to drop even more. In some areas the median days on the market have extended beyond weeks into several months. In fact, after searching the nation for communities where homes were selling the fastest, it became clear that not a single Zip Code has eluded the housing slump. But some places are doing better than others. A lot better.
After Sunnyvale, Austin, Tex., another high-tech center, comes in second at 68 days. The third-fastest-selling Zip is the Scripps Ranch neighborhood of San Diego, a wealthy inland market where listings were typically 70 days old, a span that would have been unthinkable during the real estate boom.
From the WSJ:
Meet the Nouveaux Neighbors
Canadians Now Biggest Foreign Buyers
Of U.S. Homes; Baguettes, Pâté at Parties
By JUNE FLETCHER
September 5, 2008; Page W8
Andre LeBel knew he had come home when he walked into a bar in St. Petersburg, Fla., ordered a Bloody Caesar and the bartender made it without cocking an eyebrow.
The spicy drink — a blend of vodka, Tabasco, Worcestershire sauce and tomato and clam juices — is popular in his native Canada, but until recently it was virtually unknown elsewhere. That was before Canadians started to snap up property in the U.S., drawn by the buying power of the newly strong Canadian dollar and the depressed prices of American real estate. The largest proportion of foreign buyers of U.S. homes from May 2007 to May 2008 — 24% — were Canadian, double the percentage a year earlier, according to a recent report by the National Association of Realtors.
Most Canadian buyers head for the Sunbelt, with Florida accounting for a third of all of their purchases, the report said. The Realtor group estimates there were 7,200 Canadian buyers of Florida homes in the period covered by the report, more than double the 3,500 a year earlier. In some Florida resort communities, so many Quebec residents have bought second homes that French is now commonly spoken.
Mr. LeBel says there are about two dozen fellow Canadians at the Pasadena Yacht and Country Club in the St. Petersburg suburb of Gulfport, where he bought a $360,000 penthouse condo in December. He golfs regularly with Toronto friends who jet down to their second homes on weekends, and he has no trouble finding Canadians to join him at Tampa hockey games to root for visiting Canadian teams. “We’re making the area more cosmopolitan,” jokes Mr. LeBel, chief executive of SOCAN, a Canadian copyright collective.
The Canadian dollar hit a high of US$1.10 in July 2007 and is now worth about 94 cents; it was worth only 80 cents three years ago. Unlike many Americans, Canadians also feel flush from a continued strong housing market and escalating home equity. According to the Canadian Real Estate Association, overall home prices grew 11% in 2007 from the year before, to an average of $307,265, and they are expected to rise an additional 5.3% in 2008. The group says home sales have been boosted by growth in after-tax income, strong employment and short-term interest-rate cuts in Canada.
From the WSJ:
Two NBA All-Stars Cut House Prices
By SARA LIN
September 5, 2008; Page W8
Two NBA All-Stars who listed their houses last year have cut their prices — Allen Iverson by 37% in the Philadelphia area, Rasheed Wallace by 6% in Portland, Ore.
Mr. Iverson and his wife, Tawanna, put their house on the market after the Philadelphia 76ers traded him in 2006 to the Denver Nuggets. Built in 1991, the six-bedroom, 14,000-square-foot house is in Villanova, about 20 miles northwest of Philadelphia. The four-floor French-style house has arched Palladian windows, a movie theater and a guest suite, according to the listing. The four-acre property includes a poolhouse and a stream.
The 33-year-old guard paid $5 million for the house in 2003, records show, and listed it for $6.3 million; he’s now asking $4 million. Chanel Overton of Long & Foster Cos., who has the listing, declined to comment, as did a representative for Mr. Iverson.
As for Mr. Wallace, the Detroit Pistons forward has lowered the price of his Portland home to $4.9 million from $5.2 million. He played for eight years with the Portland Trail Blazers before taking a six-year deal with the Pistons worth roughly $60 million.
Mr. Wallace, 33, bought the 1924 brick house, which sits on more than two acres, for about $3 million in 2000. The Tudor-style home has five bedrooms, five baths and a built-in saltwater fish tank. Mr. Wallace spent more than $1 million on improvements, says listing agent Tricia Epping, with Coldwell Banker, Barbara Sue Seal Properties. Mr. Wallace and his wife, Fatima, briefly listed the house in 2006 for $5.5 million before relisting it last year, Ms. Epping says.
What Are They Thinking?
During this economic slump, buyers have found themselves going back and forth—buy now, or buy later? Some buyers have become so wrapped up in timing their purchase to the absolute bottom of the market, that the question comes up as to whether timing their purchase will result in their waiting too long to benefit from the drop in the market.
Some sellers may also not be logical in their thinking about pricing. Many tend to feel the true value of their homes is the maximum value it ever was or should have been—some even denying the existence of actual market declines over the past year. As a result of this mindset, many homes that should have already been sold continue to remain on the market awaiting price adjustments.
The single most emotionally charged issue that must be overcome is the reasonable assessment of home prices. Buyers and sellers may arrive at different assessments, even when recent comparable closed sales values are put in front of them as a guide. Overcoming the distance between a buyer’s conception and a seller’s conception of a fair market value and arriving at a sales price that both consider fair continues to be a real-estate broker’s greatest challenge and most valuable service to both buyer and seller.
Have a happy one, Grim!
Buffett Becomes Vulture as HomeServices Seeks Deals
Sept. 2 (Bloomberg) — Ron Peltier runs HomeServices of America Inc., the second-largest U.S. real estate brokerage, and unlike No. 1 NRT Inc., his company is making money in the worst housing slump since the Great Depression.
HomeServices also has a parent, Warren Buffett’s Berkshire Hathaway Inc., with $28 billion of cash to help finance the purchase of brokerages that can’t weather the housing recession. By contrast, NRT’s parent Realogy Corp., owned by Leon Black’s Apollo Management LP, has at least $875 million of debt that has an 89 percent chance of defaulting within five years, credit-default swaps tracked by London-based CMA DataVision indicate.
I think many potential ‘buyers’ who are now renting are deciding whether buying makes sense financially. Some of us have given up and decided we can never buy into this market.
Wanna Buy a Car Lot Full of SUVs?
Still, with car lots full of SUVs as sales fall 53 percent and warehouses full of unsold furs looking like Big Foot movie sets, both industries are in deep doo doo.
The recession hasn’t just hit the job and real estate markets and done a number on consumer prices and home heating oil, it’s hit the luxury goods market where buyers are inexplicably saying no to monkey fur jackets from Salvatore Ferragamo.
It’s even inspired Dominion author and animal lover Matthew Scully to pen the speech for polar bear-killing, mooseburger eating Sarah Palin–he can’t support himself designing web sites like the rest of us?–and veg sympatico Gwyneth Paltrow to troll fox fur and fur lined boots for Italian luxury goods company Tod’s.
No, people aren’t just failing to buy SUVs–they’re unloading them as fast as they can along with the desperate SUV dealers who are advertising “employee pricing.”
Some are even offering gas stipends.
What Happens When Citigroup (C) Fails?
If the markets are to take bond guru Bill Gross at his word, the world’s financial markets could go through a cataclysmic failure. The head of fixed income fund operation Pimco says that a rapid sale of assets by banks, brokers, and hedge funds will cause the credit system to collapse. Almost all of these companies need cash and none of them wants to be left holding the bag if housing and commercial markets go to pieces.
The unusually eloquent Gross recently wrote “This rarely observed systematic debt liquidation is what confronts the U.S. and perhaps even the global financial system at the current time. Unchecked, it can turn a campfire into a forest fire, a mild asset bear market into a destructive financial tsunami.”
Gross wants the US Treasury to move into the market and buy distressed assets to stop the knife from falling.
The problem with the Gross program is that the US Treasury may be nearly broke. To get it “unbroke” tax-payers will have to be tapped for extra dollars. American citizens are not exactly flush with cash.
Nothing predicts recession like the collapse of the monkey fur jacket market..
By PIMCO’s Bill Gross,
There’s a Bull Market Somewhere?
What Happens During Delevering
1. Risk spreads, liquidity spreads, volatility, term premiums – they all go up.
2. Delevering slows/stops when assets have been liquidated and/or sufficient capital has been raised to produce an equilibrium.
3. The raising of sufficient capital now depends on the entrance of new balance sheets. Absent that, prices of almost all assets will go down.
The above might seem simplistic to us at PIMCO but it is not necessarily clear to all readers. Term premiums? Risk spreads? Volatility? What do they have to do with bull or bear markets? Well, what Step 1 really says is that as GSEs, banks, investment banks, global hedge funds and even individual households delever their balance sheets by shedding assets, they lower the prices of not just what they are selling, but other securities that are arbitrageable within the marketplace. The past 12 months, for instance, have focused on subprime and alt-A mortgages and their drastically lowered prices. Stocks of companies that own them are of course marked down, but so are other assets of impeccable quality. Because junk mortgages now in some cases yield 15%, money at the margin is pulled out of the agency mortgage market where implicit guarantees and explicit Treasury promises to provide standby capital lead to bona fide AAA quality ratings. We estimate that the process of delevering has lowered the price on FNMA and FHLMC mortgages by as much as 3-4% and raised the yield on their 30-year fixed paper by as much as 75 basis points.
SB..
Seriously. Are regular people liquidating their 401K’s? We did sell all of our stocks and have decided to wait and see for a year.
Grim,
Check your gmail if you get a chance. Have sent you two emails recently.
Oh and happy birthday (on Sunday)! What are you, like 25 now? Cheers!
Happy birthday grim, thanks for all you do on this blog. Your time and effort is appreciated by many.
Mike Morgan’s a wee bit cranky this morning:
http://realestateandhousing2.blogspot.com/2008/09/pasulson-thief-of-century.html
Happ B day
Happy Birthday, Grim! Your best year is about to happen.
Happy Birthday!
Mine is on Wed.
Happy birthday Grim! Thanks for everything you do.
SG (8)-
Great article. Some factlets that deserve more prominent mention:
1. NRT’s parent Realogy Corp., owned by Leon Black’s Apollo Management LP, has at least $875 million of debt that has an 89 percent chance of defaulting within five years, credit-default swaps tracked by London-based CMA DataVision indicate.
2. NRT’s pace of acquisitions has dropped to four this year from an annual average of 20 since 2002 as Realogy’s debt ratio — borrowing relative to earnings beforeinterest, taxes, depreciation and amortization — increased to 4.9 in June from 3.8 at the end of 2007.
3. NRT’s options are limited by the growing debt of its parent, said Steven Kaplan, a finance professor at the University of Chicago Graduate School of Business. Realogy, based in Parsippany, New Jersey, said it will pay interest in October on $550 million of 11 percent notes due in 2014 by borrowing $32 million. The company had total debt of $6.4 billion at the end of June.
“If you are paying debt with new debt, you’re not in a position to be making acquisitions,” Kaplan said. “Unless a move puts extra cash on their balance sheet right away, it’s not happening.”
I think Realogy is close to becoming toast. Their debt ratio cannot exceed 5.6, and it’s predicted to be close to 5 by this time next year (given the rapid and parabolic rate of their debt expansion, this could be way too-conservative an estimate). I have a contact within the company who lets me know when payroll has been missed- although they haven’t missed one in the past 5 months)- and many of their franchisees are going, or have gone, belly up. In the NE, Realogy has quietly moved into failing franchises and taken over operations after owners have walked away. They are also aggressively cost-cutting within offices, primarily by chasing out well-compensated managers and replacing them with poorly-compensated caretakers and paperwork geeks.
grim Says:
September 5th, 2008 at 6:25 am
Be sure to wish grim a happy birthday on Sunday!
I specifically do not wish you a happy birthday. In fact, I offer you an anti-happy birthday. How old are you again 24? The chest hair eventually goes gray you know. Just ask clot.
Happy Birthday on Sunday, Grim. I sure hope all is well. Have you been involved with any crazy R/E deals?
Have you been approached to do any follow-up interviews regarding the NJ real estate market?
More big PIMCO news. Partnering this guy with Bill Gross is diabolical. Should be fun to watch:
http://tinyurl.com/6ovv2x
Chi (23)-
“The chest hair eventually goes gray you know. Just ask clot.”
Fortunately, Ron Popeil has come up with an ingenious solution to this humiliating and deeply personal problem. I am shocked that the Nobel Prize committee has not yet recognized his groundbreaking contributions in this area.
Q to the Board: Any suggestions for seasoning a cast iron skillet? Bear in mind Mrs. Chicago is olive oil/organic-central….merci
Cindy (24)-
Why interview Grim? Any good journalist can just look at this board and see the current state of affairs in NJ RE.
We’re all talking about wine, food, M, O, VPILF and cars. Just marking time until the blow-off bottom.
Chi (27)-
Repeatedly veg oil and bake the empty skillet in a hot oven. It will take use to develop that black carbon patina, but a few pops in a hot oven will develop some non-stick qualities and keep it from rusting.
Until the black patina develops, don’t EVER use soap to wash the pan. To clean it, scrub it as clean as you can with salt, then rinse with hot water.
Unemployment hits 6.1% – I knew someone got hold of the report early.
How can their be a glut of houses that can’t sell as they are being listed for prices higher then they are worth?
I thought realtors help their clients correctly price their houses.
In regards to 27, the best way for a wife to to season a cast iron skillet is for her husband to come home late with the smell of liquir and perfume on him and lipstick on the collar. Once Mrs. C smashes Mr. C on the head with the skillet several times it will be properly seasoned.
Chifi
I found this article and I think its excellent:
http://www.melindalee.com/Cast-Iron.html
Rising tolls on the turnpike and parkway?
http://www.nj.com/news/index.ssf/2008/09/corzine_and_lawmakers_discuss.html
Link for unemployment rise.
Chi,
Alton Brown seasons cast iron in “going dutch” there are 2 parts this is #1 where he explains seasoning the pan.
http://www.youtube.com/watch?v=qfvj2hyHQXA&feature=related
sl
Re 30,
Certainly explains yesterday.
(28) Clot – “Why interview Grim?”
Oh, I was just remembering back in the day when the local paper declared Grim a bit of a “maverick.” I wondered if he had been approached to do a follow up.
Hoppy Bird-day Grimmie!!
I looked up Sept 7th for famous people born on that day. Just a bunch of D-list bozos like Peggy Noonan, Garrison Keilor, and Gloria Gaynor……looks like you can claim the day for yourself!!
Have a great Birthday, grim!
sl
You should hear folks on CNBC power lunch segment. Are they being compensated high when they Cheer up the market, even in face of all grim news. The new guy, Dennis Kneale, don’t know his background, but is just clueless.
# toshiro_mifune Says:
September 5th, 2008 at 8:35 am
Unemployment hits 6.1% – I knew someone got hold of the report early.
Futures way down as unemployment rate goes to 6.1%…
Reuters
August jobless rate at 4-1/2 year high
Friday September 5, 8:35 am ET
WASHINGTON (Reuters) – The U.S. unemployment rate unexpectedly shot up to 6.1 percent in August, its highest in more than 4-1/2 years, as employers cut payrolls for an eighth straight month and labor markets showed signs of accelerating decline.
The Labor Department said 84,000 jobs were lost in August, significantly higher than the 75,000 that economists surveyed by Reuters had forecast. In addition, July’s job losses were revised up to 60,000 and June’s to 100,000 from a previously reported 51,000 in each month.
Department officials said the August unemployment rate was the highest since December 2003. Analysts had expected the rate to remain steady at July’s 5.7 percent rate rather than to jump.
There were steep cuts in hiring in nearly every major category of employment. Some 61,000 manufacturing jobs were lost in August, the most for any month since mid 2003, and 8,000 more construction jobs were cut. There were 53,000 jobs eliminated in professional and business services and 4,000 in leisure and hospitality industries.
The average hours of work remained unchanged from July at 33.7 but employers cut overtime to an average 3.7 hours per week in August from 3.8.
clot chi
regarding cast iron.
I alwasy leave a very light coat of oil on the pan after i clean it. Thats just how i was taught .
SG,
I personally believe that Bill Gross is on the money in his prediction. Although his reasoning here is self centered and making money, the end result is the same
From Bloomberg:
U.S. Payrolls Fell 84,000; Jobless Rate Jumps to 6.1%
The U.S. lost more jobs than forecast in August and the unemployment rate climbed to a five- year high, heightening the risk that the economic slowdown will worsen.
Payrolls fell by 84,000 in August, and revisions added another 58,000 to job losses for the prior two months, the Labor Department said today in Washington. The jobless rate jumped to 6.1 percent, matching the level of September 2003, from 5.7 percent the prior month.
Workforce reductions at companies from UAL Corp. to Gannett Co. are adding to the woes of Americans hurt by lower home values, scarcer credit and higher prices. The report may fuel concern that consumer spending, the biggest part of the economy, will decline and bring the expansion to a halt. Stock-index futures dropped and Treasury notes climbed.
“It certainly increases the probability that we really are in a recession,” William Poole, former president of the Federal Reserve Bank of St. Louis, said in an interview with Bloomberg Television. “It is a weak number, including the revisions.”
Payrolls were forecast to drop 75,000 after a previously reported 51,000 decline in July, according to the median estimate of 76 economists surveyed by Bloomberg News. Estimates ranged from declines of 40,000 to 150,000. The jobless rate was projected to remain at 5.7 percent.
happy bday grim
#8 & #22,
Does anyone know whether HomeServices of America, Inc. has a presence in NJ RE franchises?
Looks like SP has the academic credentials of W too…
Palin Switched Colleges 6 Times in 6 Years
Republican vice presidential candidate Sarah Palin seems to have switched colleges at least six times in six years, including two stints at the University of Idaho before graduating from there in 1987.
Federal privacy laws prohibit the schools from disclosing her grades, and none of the schools contacted by The Associated Press could say why she transferred. There was no indication any were contacted as part of the background investigation of Palin by presidential candidate John McCain’s campaign.
“Our office was not contacted by anyone,” said Tania Thompson, spokeswoman for the University of Idaho in Moscow.
http://abcnews.go.com/Politics/wireStory?id=5728215
Looks like SP has the academic credentials of W too…
Palin Switched Colleges 6 Times in 6 Years
Republican vice presidential candidate Sarah Palin seems to have switched colleges at least six times in six years, including two stints at the University of Idaho before graduating from there in 1987.
Federal privacy laws prohibit the schools from disclosing her grades, and none of the schools contacted by The Associated Press could say why she transferred. There was no indication any were contacted as part of the background investigation of Palin by presidential candidate John McC’s campaign.
“Our office was not contacted by anyone,” said Tania Thompson, spokeswoman for the University of Idaho in Moscow.
http://abcnews.go.com/Politics/wireStory?id=5728215
(34) toshiro
“The jobless rate rose for a clear-cut reason – because people lost jobs.”
“The labor force fell by 8,000 in August.”
In a way, it is a shame this is an election year. For months now folks have been putting off the inevitable until they could get out of Dodge.
At a time when action and leadership was called for it has been avoidance, forestall, and wait-and-see.
I am sure someone will be simply “shocked” by these numbers.
Yes. Happy B’day Grim.
May your hairline recede slower than that of Gary’s.
:P
I would like to sneak into the Lehman Brothers Financial Services Conference, to be held at the Hilton New York in New York City from Monday, September 8 through Wednesday, September 10, 2008.
49 – John.
I hear that they are diversifying into hookers and blow.
For Tom
Lush lawn – higher home value
Turn that lawn into a fine green carpet and your whole house becomes more valuable.
http://money.cnn.com/galleries/2008/real_estate/0809/gallery.lush_lawn.moneymag/index.html
Subprime, CDO Losses Total $550 Billion, S&P Says
Sept. 4 (Bloomberg) — Subprime mortgage bond losses are likely to total as much as $550 billion, or about half the value of all first-mortgage subprime debt issued in the past three years, Standard & Poor’s Chief Credit Officer Mark Adelson said.
Banks and brokerages have already written down $508.5 billion in holdings, according to Bloomberg data, and Adelson’s estimate may be a sign that much of the damage to bondholders from the credit crisis has been accounted for.
“There’s a lot of double counting involved because most of that paper is held by CDOs,” said Adelson in an interview.
Adelson said this distinction has been blurred by using the term “subprime securities” to refer indiscriminately to both structured-finance collateralized debt obligations and first-lien subprime mortgage asset-backed securities. While many top-rated parts of the CDOs may default, only a few AAA asset-backed securities will, Adelson said.
About $200 billion in losses come directly from defaults on subprime bonds, almost all of it in debt rated below AAA, S&P’s top rating, Adelson said. Between $200 billion and $300 billion of the losses stem from CDOs, including top-rated parts of those structured debt securities backed by other bonds, Adelson said.
The remaining $50 billion in losses come from second-lien subprime debt, also known as a second mortgage or home-equity line of credit.
Hedge Fund Pockets
“Hindsight reveals that they created securities that were vulnerable to rapid and severe deterioration far beyond what market participants had anticipated,” Adelson said in the report published today by S&P.
The billions of dollars bet on credit-default swaps, or derivative contracts used to speculate on or hedge subprime mortgage bonds, don’t affect the larger view of the market, Adelson says.
“I don’t if some bank money ends up in the pocket of a hedge fund,” Adelson said. “You can’t lose the same dollar more than once.”
Wish you the very best, Grim! Happy B’day on Sunday!
toshiro_mifune Says:
September 5th, 2008 at 8:06 am
Happy Birthday!
Mine is on Wed.
Tosh – mine too!
4…I’ll bet teh Canuck didn’t even tip the bartender.
3-6″ inches of rain are predicted on Saturday. Pick your orange tomatoes now as they will explode by Monday.
The advice on the cast iron skillet is good. No soap should ever be used which will naturally leave a coating of oil which prevents rust. Although a high quality skillet will never rust anyhow. Use teflon coated or plastic spatulas only to avoid scratches. I didn’t bake mine and it seasoned just fine, although it seems to improve with each use.
A little R/E here to keep somewhat on track. Here in North Bergen County a very prestigious housing development has a house under 1 million. I can;t remember this happening since 2000. Prices there in the better parts (yes there is a hierarchy even in ritzy developments) are routinely listed in the 2 million range. Pictures on trulia are old with snow on the ground so it’s an old listing that has been um…updated.I can’t believe Rio Vista is going under 1 million. Big time Comp killer esp since there are less nice developments here with prices beyond 1 million.
Ike is still looking pretty mean as well. Should hit the FL keys by Tuesday afternoon with 120-130 mph winds.
http://tinyurl.com/Yowza
A speculation of where unemployment (U3) tops out in this cycle? I was thinking a max of somewhere around 7% next spring but this jump makes me wonder if losses are going to be steeper, perhaps much steeper, than that.
#54 – We rock!
Kettle1: I though of you when I saw this at Dealnews.com!
http://www.costco.com/Browse/Product.aspx?Prodid=11219554
China: Help! Our US Investments Are Worthless!
The US housing crisis is now clobbering China, too. China’s central bank’s investments in Fannie and Freddie mortgage trash are producing limited returns, hurting the bank’s capital ratios.
Thus, the bank needs money. This could have several ramifications, including attempts to keep the yuan from strengthening further against the dollar…and slowing improvements in the US trade deficit.
a monkey fur jacket sounds about as attractive and a jacket made from my father in law’s back hair.
Four Facts About this Crisis – Friday 5th September 2008
So where is the economy going in the next six months? Here are my projections:
1. The housing decline is not yet done, because we will need another year to unwind foreclosures in the pipeline. The housing bubble still has another 10% to 20% to go to fully deflate.
2. Consumers in the US are not able to expand credit and are increasingly concerned about the outlook for the economy, so they will slow spending both at home and on imports, which means we are in a recession or about to confirm one.
3. The financial/banking system is weaker than understood. The global system and literally trillions of dollars in derivatives has left the world’s banks teetering on the edge. Don’t jump back into financials.
4. A slowing economy – recession – coupled with inflation, creates a condition referred to as stagflation, as the simulative bailouts compete with the debt implosion of overleveraged financial institutions and real estate, to leave us with stagnation and still high costs.
5. The result of this is that the inflation rate, interest rate, food, energy and precious metals are heading higher as the dollar is debased.
6. Higher rates are not good for housing and stocks.
Finally, it is important to recognize that the world remains in the throes of a deep and serious crisis. While many analysts express the view that the worst is over – or that, after a modest downturn, things will bounce back just like they always have – our view is that what we will actually witness going forward is a fairly steady erosion of paper currency purchasing power and sluggish economic growth.
The crisis will accelerate, moving faster, even, than in previous major shifts such as that witnessed in the 1970s.
While history may find we are too pessimistic at this point in time, in our view it is far better to prepare for a worsening crisis and hope that it does not materialize, than to expect business as usual.
Hello Everybody
Just wanted to share my new experience.
If your Windows XP denies to run due to an error related to missing HAL.DLL, invalid Boot.ini or any other critical system boot files you can repair this by using the XP installation CD. Simply boot from your XP Setup CD and enter the Recovery Console. Then run “attrib -H -R -S” on the C:\Boot.ini file and remove it. Launch “Bootcfg /Rebuild” and then Fixboot
Cheers,
Carl
#27
I think bacon grease works. if you haven’t already bought the skillet, you can get pre-seasoned ones (e.g., Le Creuset)
Stu [48],
But I’m still kinda cute!
Grim,
No access over the weekend what with settling in and all so Happy Big 29th in advance from the Deplume family.
Nom
James – Happy Birthday! A Sunday birthday is gonna make Monday extra tough….you better take a holiday on Monday.
stu,
AWWW i’m touched! glad to know i leave an impression
grim,
make sure you order the hookers and blow early. with everyone shut in this weekend you wouldnt want to lose out on a good Bday celebration. I hear the ration is supposed to be 1 hooker for every decade you have lived ( 25 = 2 hookers, 35 = 3 hookers etc)
Great article by Depew over at Minyanville regarding Gross/PIMCO. I don’t think anyone has posted it yet, really worth the read.
Employment down 6.1 %
– Damn! Those tax cuts sure are working great. Now, the ultra-rich have less people to pay.
OT:
You can’t sell a house here
“It has even spread to South Africa — you can’t sell a house here,” said Sunter.
“Things are getting very tough,” he said.
“We had minor recessions in 1998 and 2001 — but nothing like we are seeing now,” he said.
He adds that in addition to the classic recession scenario is military action and the threat of military action, like a US invasion of Iran as Iran continues with its nuclear posturing and the US continues with its threats.
“There does seem to be a showdown scenario,” said Sunter.
He concluded that the Russian bear was now a new concern after its invasion of Georgia.
“Russian invasion is huge”
“The Russian invasion of Georgia is huge,” he said.
He adds that Pakistan has an estimated 100 nuclear warheads and this is serious if it falls into the wrong hands.
“It is difficult to make a judgement on Pakistan — now that [Pervez] Musharraf has been forced to resign there might well be another round of unrest as parties seem to have split,” says Sunter.
“So there is major uncertainty and we’re in the age of turbulence, which we haven’t been in for 30-40 years.”
“There are lots of flags and possibilities that have to create a tougher global scenario going forward,” he said.
He said that while some may point to China and India forging ahead and saving the world.
“But that’s why do scenarios — you have to choose between the long boom and the hard times scenarios.”
http://business.iafrica.com/features/1126800.htm
#41 stu: Can we call it a recession now?
We cooked with cast iron for many years before I went to teflon coated.
I remember seasoning a few pans. I don’t recall doing anything more then putting it on the burner and leaving it on high with a little bit of oil spread evenly all over it.
We didn’t wash it with soap for the first few uses, just removed food debris under hot water, and always ended with a thin application of vegtable oil before storing.
The first oil application pretty much keeps the metalic taste out of your food and repeated oil-ing for the first 5-10 uses helps to build that patina. Nothing more then a paper towel with a spot of cooking oil on it.
If it ever starts rusting after washing then just reapply oil before storing. We never had that issue but that was what was told to me.
happy Birthday grim;all the best to you, and thanks as always for all that you do here.
Raising taxes on the rich alone = punishing hard work:
“Officially, the average workweek has changed little in the last two decades. But those figures mask a shift in who works the most. In 1983, the lowest-paid workers were more likely to work long hours, according to the National Bureau of Economic Research. But by 2002, the most highly paid workers were twice as likely to work long hours as the lowest paid.”
http://www.nytimes.com/2008/07/27/jobs/27mgmt.html?pagewanted=print
SAN FRANCISCO (MarketWatch) — Continental Airlines Inc. (CAL:Continental Airlines Inc
said Friday that it will start charging $15 for the first checked bag for certain customers who buy economy-class tickets. The fee will go into effect Oct. 7. The fee won’t apply to EliteAccess customers, OnePass Elite and SkyTeam Elite members, customers traveling on full-fare economy class tickets, or military personnel and their families traveling on official orders, Continental said
Home loan troubles break records again
By Alan Zibel, AP Business Writer
Delinquencies, foreclosures rise to more than 9 percent of US home loans in second quarter
WASHINGTON (AP) — An industry group says a record 9.2 percent of American homeowners with a mortgage were either behind on their payments or in foreclosure at the end of June, as damage from the housing crisis continues to mount.
The latest quarterly snapshot by the Mortgage Bankers Association on Friday broke records for late payments, homes entering the foreclosure process and for the inventory of loans in foreclosure.
The percentage of loans at least 30 days past due or in foreclosure was up from 8.8 percent in the January-March quarter, and up from 6.5 percent a year earlier.
In one bit of positive news, delinquencies on subprime adjustable-rate loans dipped 1 percentage point from the first quarter to 21 percent.
http://www.costco.com/Browse/Product.aspx?Prodid=11219554
Stu,
I’m gonna pick up 10 of those buckettes and ship them to Domenica.
so what do the denizens of this blog think of the idea of a flat tax system, everyone above the poverty level pays 30% ( the 30% is just an example number) and there are NO loopholes or deductions
Birthdays are over-rated.
Either way, enjoy your 29th.
29 eh,
Sorry grim but you just missed that 3rd hooker, only 2 for you!
The fun continues!
China’s central bank is short on capital, which leads to some amusing commentary.
Wasn’t there a report published that studied what everyone paid in taxes.
No matter your income level, everyone paid about 40% in taxes. Property, City, Federal, County they all add up and result in more or less a flat tax for everyone.
I wish I could remember where I read/heard that report from.
#81 – I’d support a flat tax as long as it is applied to all entities, both individual and corporate.
77- Skep
There are no demonstrable effects of that theory. More supply-side voodoo –
“Reality of Bush tax cuts underperformed theory.
President Bush reduced the top marginal tax rate to 35 percent from 39.6 percent and cut the rate on long-term capital gains and dividends to 15 percent. Such “supply-side” tax cuts are touted as an incentive to work, save and invest.
Oops. Saving and investment were “anemic” during the Bush years, according to Paul Kasriel, chief economist at the Northern Trust Corp. in Chicago.
The plunge in the personal savings rate to a post-World War II low of zero during the Bush years coincided with a decline in the labor participation rate, Kasriel says.
Business investment seems to have missed the tax-cut incentive as well.
“The only time the net stock of nonresidential fixed assets grew slower than in recent years” was when Poppy Bush was president, Kasriel says. ”
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_baum&sid=a33YVKQ7OoaU
#81
I love the flat tax idea. It is naturally progressive (same percent of higher basis is more dollars), simple, efficient and I think there is a strong argument that it would result in increased revenue (due to elimination of deductions). Problem is that the tax code is the #1 arena for rewarding special interests. Going to a true flat tax would eliminate a major source of graft in our political system (which obviously makes it unpopular with politicians)
Getting back to the topic of the income gap or what I call the diminishing wage:
Here is a link to an excellent article (hat tip to the Economist’s View) showing the great divide.
GDP per Capita versus Median Family Income
http://economistsview.typepad.com/economistsview/2008/09/gdp-per-capita.html#more
Make sure you then follow the link in the article to the ‘Rising Inequality’ link in the last paragraph. The comments on this linked article are very educational as well.
Personally, I think the solution is through collective bargaining, so the workers can get back a bigger piece of the profits from their efforts than their executive supervisors receive. Unfortunately, so many unions today have been destroyed by rampant corruption.
#87 skeptic: I agree, but it will never happen IMO.
The Solution to America’s Housing Problem
#86
Not sure what I posted in #77 above is theoretical. High income earners are far more likely to work more hours– this is just a fact. Above and beyond the debate as to what sort of tax policy is the the most effective economically (within which I think there is plenty of room for reasonable disagreement), there is a moral element to taxation. I think a policy of taking an ever higher percentage of income from people who, as a group, simply work harder is flawed morally.
Here is an interesting analogy re: taxation:
Five friends go to a bar, one of whom is rich, another who is middle-class, and three who are poor. The bartender tells them it will be $2 per beer ($10 total), but the poor guys don’t have any money. The rich guys say, no problem, we’re all friends here, I’ll pay for you all as long as the middle-class guy takes care of himself. So rich guy ponies up $8 and middle-income guy ponies up $2.
For a while, they continue the bar visits and the rich guy continues to pay. One day they walk in, the rich and middle-income guys pay the bartender but as the bartender is walking back to the register he stops. He says, “you know what, you guys are great customers, never cause me any problems, so I’m only going to charge you half price from now on.”
He slides $5 in front of the five friends. The rich guy reaches for four of the one dollar bills when one of the poor guys stops him. “Hold on a minute. He gave the discount to all of us. I should get my fair share, $1.”
The rich guy is shocked, and says, “but I foot 80% of the bill for our beer. Shouldn’t I get 80% of the discount? You didn’t even pay anything!” After some arguing, the rich guy picks up $4 and storms out.” The next day, the bartender walks up to the group of guys but the rich guy is not there. “Only four of you today? That’ll be four dollars. All the guys look at each other and suddenly realize they can no longer afford beer.
so what do the denizens of this blog think of the idea of a flat tax system, everyone above the poverty level pays 30% ( the 30% is just an example number) and there are NO loopholes or deductions
Kett,
No loopholes and No deductions. What are all these accountants gonna do now?
It’s good for the country but not good for Washington.
I support a flat tax, but the key is for there to not be loopholes. The rich will not support it for a minute though. Once the offshore tax shelters become moot, they will fight it tooth and nail.
I’m fine with a flat tax – just with a standard deduction for all (as in the first $10k of income isn’t taxed which would protect the working poor from being penniless).
394 Stu: And the NAR will not support it either.
skep-tic nailed it on the head. lobbyists would be all out of work and they’ll fight it tooth and nail. than of course maybe they would find more useful jobs and contribute to society.
And in other news the DJIA might just drop to 11,000 today. For TA people, a drop below 11K which is a deeply psychological barrier, might cause even more people to pull the trigger once surpassed.
skeptic, 91
I think a policy of taking an ever higher percentage of income from people who, as a group, simply work harder is flawed morally.
I would agree with this as a general statement. hence why a government should not run a deficit. spend what you have and no more.
And i am aware that there are economic theories that say a deficit is a useful tool. It may be in theory, but i think it causes more problems then it solves in the real world.
Flat tax also gets rid of all the anxiety over tax day. It would save a couple of grey hairs on everyone. Way too much sense for it to get deployed.
The good ol’ Ross Perot days. Why can’t we have another independent shake up the establishment!
#100 – We’re down to 10827 in July. We’re just revisiting those depths now.
103 Should read “We were“….
But I thought 10700 was the bottom. That’s what all of the experts said!
The unfortunate reality that really demolishes much of the class warfare approach to taxation is that the truly massively rich will always be able to find ways to lower their effective rate. You will always be able to move money offshore and even if you have to pay some sort of exit tax, you can get a lower rate on your investments going forward.
The people who more progressive taxation really hit harder are high wage earners. I do not think the two earner couple who are making $250k in the tri-state area are really the paradigm of wealth that most people have in mind when they support a tax policy that goes after “the rich.”
skep-tic Says:
September 5th, 2008 at 10:39 am
#81 I love the flat tax idea. It is naturally progressive (same percent of higher basis is more dollars), simple, efficient and I think there is a strong argument that it would result in increased revenue (due to elimination of deductions). Problem is that the tax code is the #1 arena for rewarding special interests.
There is an ostensible flat tax…the AMT
A flat tax would do wonders for this country. I firmly believe half the reason people don’t pay their fair share of taxes is because they think everyone else is getting one over on the system and they are probably right. Moving to a flat tax would simplify and hopefully make the horrors of the tax code more transparent to all.
I personally would have no problem paying more taxes as long as they are fairly distributed. By fairly I mean equally.
Stu 88
good link, thanks
On a philosophical note mentioned in the comments from stu’s link:
Automation has been intended to improve the lot of man. The original idea being that the more work you automate, the less many power required per $ generated. This increase in productivity was imagined and intended to give people time to live their life, i.e increase automation by 50% and i have 2X the free time at the same pay level as before.
While this description is over simplified the idea is the dsame. What has happened is that productivity gains are filtered upward to the top instead of back to the workers.
We have been blinded by consumption. modern automation would allow the base needs of an individual to be fulfilled in a fraction of the time and effort of 50 years ago. Instead of that time going back to the worker, the time is utilized to produce additional consumer products that ultimately have little or no overall benefit to quality of life.
/philosopher kettle off
It’s PRIME time:
AP:
Home loan troubles break records again
http://biz.yahoo.com/ap/080905/home_foreclosures.html
“But for the first time since the mortgage crisis started, delinquencies on subprime adjustable-rate loans declined.”
“What’s driving the delinquency rate up now is the number of homeowners with risky, adjustable-rate prime loans made with little or no proof of the borrowers’ income or assets.”
“More than one out of 10 borrowers with a prime adjustable-rate loan is now delinquent or in foreclosure. That portion, 11.3 percent, was up from 9.7 percent in the first quarter and is expected to continue to rise as more homeowners see their monthly payments spike.”
#109
Kettle– it all depends on how long of a view you take. In the NYTimes article I posted above, there is mention of 70 hr weeks being the norm among the lower class when the USA was an agrarian society. During the early industrial period it was of course a major achievment to get a 5 day work week and gradually reduce hrs to 8 per day for many people. Perhaps 40 hrs a week or so is the level at which people simply do not need any more leisure time.
Kettle1:
As a workflow engineer, many of my solutions require automation. This may reduce the number of workers needed in a workflow. In most cases, the workers are reduced through attrition. In such a scenario, the gains go directly to the bottom line, resulting in increases for the executives at the top. Do the remaining workers receive any benefit outside of dealing with less headaches? Most certainly not. And if they are lucky, they will get their annual raise equal to half of M3 inflation.
#43 grim
Happy Bday.
ADP came out with their unemployment report yesterday.
http://www.thestreet.com/story/10435796/1/_msnh/job-market-looks-grim-reports-say.html?&cm_ven=MSNH&cm_cat=FREE&cm_ite=NA
Skep:
Perhaps people might work longer hours if they felt like it was getting them somewhere. I used to frequently put in the 60-70 hour work weeks. It would result in an occasional promotion complete with a salary boost that (if I was lucky) was equal to me getting paid 1/4 time for those extra hours I put in. I now value time with my family more than those piddly salary increases and am lucky enough to have a supervisor who respects my wishes. Now if we could only control inflation and property taxes.
They fail to mention that the TV is located on the sun porch; also known as the “family” room. The flat screen TV sits about 5 feet away from the couch. You want closets in your bedroom? Try to find them and let me know when you do. Yeah, bring your checkbook for $619,000, because this one’s a real charmer.
http://www.realtor.com/realestate/ramsey-nj-07446-1102542283/
here’s one of the guys who wants to raise taxes:
RANGEL ADMITS TO VILLA INCOME
By ISABEL VINCENT
September 5, 2008
Harlem Rep. Charles Rangel admitted that he earned more than $75,000 of undeclared income from a Dominican Republic villa, after The Post exposed his wrongdoing in an exclusive report Sunday.
…
A Post investigation into Punta Cana found that the sun-drenched beach front “casita” 412 was regularly rented out for up to $1,100 a day, yet Rangel had said he received no income in 2006, 2007 and other years. In other years, he had declared rental income of up to $15,000. He now admits that over 20 years he made at least $75,000 in rental income that he didn’t report.
The chairman of the powerful Ways and Means Committee at first denied that he earned any money to a Post reporter, then said the whole thing was “a private matter.” But now Rangel’s lawyer says disclosure forms will be refiled for a number of years.
http://www.nypost.com/seven/09052008/news/regionalnews/rangel_admits_to_villa_income_127682.htm
my question is how does a congressman afford a beachfront carribean villa in the first place?
random oil chart for people.
enjoy
http://www.scitizen.com/cacheDirectory/HTMLcontributions/img/a2f1.gif
That’s not a chart Kettle1… it’s more like a pretzel.
Skeptic 116.
Why isnt rangel is jail?
if you or i did this we would be in prison! is there any doubt that our system is corrupt beyond redemption
Kettle– totally agree. Rangel represents everything that is wrong with career politicians. He has four rent controlled apartments in NYC and evades taxes, yet he is the chairman of the most powerful committee in Congress, in charge of taxation no less! the fact that this apparently not a major news item beyond the NYPost is depressing indeed
A corrupt politician? Why never!
I think the Rangel story would need to have some sort of s-ex (preferably g-ay) involved to make it really newsworthy.
sorry stu, am hungry ;)
I’m sensing some partisan political entries coming.
interesting analysis of home prices, followed from stu’s earlier link
How Many Hours Does It Take To Buy A House
http://www.kaleberg.com/househours/index.html
Rangel, as slimey as the grease in his hair.
I’m not partisan, we should immediately execute all politicians who have been in office for more then 1 term. political posts were meant to be a part time endeavor of citizens, not a career.
Lets make that point clear. Execute all current politicians who have been in office for more then 1 term. We could use the national mall in DC
Is that the best they can come up with for Rangel? That he averaged $3,750 in unreported income over the course of 20 years?
I’m sorry I don’t see big news here. The rent controlled apartments was much better.
111#, skep-tic, i believe people in both ends of income work more hours. low end did not show in the stat since they worked illegally.
SA:
Housing Prices: Bottom or Temporary Bear Break? (Gary…read this)
http://seekingalpha.com/article/94110-housing-prices-bottom-or-temporary-bear-break
“If you’ve been listening to the Street, you will have no doubt heard more talk of a real estate bottom again. Admittedly, there have been a few encouraging signs emerge in the last month. They include an improvement in the rate at which the S&P Case-Shiller 10 and 20-city composite home price indexes have been dropping and signs from a number of regions that prices are actually increasing month-over-month in a few cities (see chart).
In some areas hardest hit, buying foreclosures has become the latest fad and sales figures in areas of California, for example, have experienced impressive increases. How long this continues, however, remains to be seen.
But before breaking out the champagne and doing the bottom dance, here are some rather sobering charts (and numbers) to consider.”
Uhm… to clarify… I mean wake me when it’s news.
The report claims it was one of the most popular villas yet it looks like it was only rented out less than a dozen nights a year according to Rangel’s claims.
This is horrible reporting. They didn’t even connect the dots they had let alone look deeper into it.
and can i just say to any 3 lettered government agency monitoring this blog: I am really just kidding about executions and any other such suggestions which could land me in GITMO. HEHEHEHE its funny right?
Oh, and can you you take my name off some of those lists please. I always seem to get stopped and searched at EVERY security point in airports
From an article on Why the Fed won’t raise interest rates.
“Institutions with big exposure to option ARMs are going to be pressured for some time, notes Cass on the breakingviews.com site. Two cases with high exposure are Wachovia (WB) and Washington Mutual (WM).”
#129
bi– that is a very good point.
Tom– you don’t think tax evasion by the chairman of ways and means is newsworthy? I’m sure we would all like to knock a thousand or two off our tax bills every year for the next twenty years
# 29
Clot,
Is your other name Heloise? Or, maybe, Martha?
120-
“the fact that this apparently not a major news item beyond the NYPost is depressing indeed”
– Well, It is on the front page of the NYT. Kinda obscured by all the Mc-same mug shots.
Front page of the NYT. How could that be. Wasn’t the NYT the highest rated newspaper on the infamous ‘Bi – Liberal’ scale?
Mc-Same? That’s pretty clever, but not as clever as McCane!
just read the Times article. Thanks for pointing that out. Slant of the Times is (not surprinsingly) that it’s not a big deal. Honest mistake by the guy in charge of writing the tax laws.
I am totally clueless about the theory of distribution of taxes in general, please bear with my ignorance.
The poverty level for a couple in the US – $14,000.
So the proposed flat tax – is 30% (arbitrary figure). So a couple making $40,000 will pay about $12,000 in taxes.
A couple making $250,000 will pay about $75,000 in taxes.
How do you expect any family to survive with $28,000 a year?
Now, if we cut the taxes of the 40K couple in half – $6K and make up the differential in the top half – the difference in the tax rate is 2.4%.
I think we can afford to make this a more equal society. For anyone who thinks this will act as a disincentive to work harder, why would you want to live on 40K a year to save taxes?
I am sure that there are a lot of holes in this argument – but I am just trying to learn.
Homes in the US on a equilized basis are generally 20% more than in Canada since mortgage interest in Canada is not tax deductable. So if we go flat tax and take away mortgage deduction and RE deduction we take an overnight 20% haircut on housing prices.
Funny part is it will hurt the middle class a lot harder than the rich. Most of the 50 year old 300K earners have their mortgage nearly paid off and can’t deduct RE taxes as they are in AMT. The 100k a year 35 yo couple who bought the run down split in 2006 for 600k with 10% down and 10K re taxes will be crushed.
All I know was back in my school days if I crossed $5,200 I had to file an income tax return. If I earned $5,100 it counted as zero income on my financial aid form. If I earned $5,300 it counted as $5,300. All four years I stopped working right before I hit $5,200. Soaking people at a set income just stops people right below that income from striving for more.
#94 – That makes no sense
John,
Perhaps when you were in school you did’nt need to make more than $5200. There is a need to make more than $40,000.
KL
Victorian– I think most flat tax proponents are in favor of exempting a certain amount of income from tax completely (say, the first 30k). So in your example, the family making 40k would pay 3k in taxes (effective rate of 7.5%) whereas the 250k family would pay 66k in taxes (effective rate of 26%).
“Rising tolls on the turnpike and parkway?”
It’s about time Corzine increases something, he has not risen taxes in about a year now.
What’s he waiting for?
oh snap! this could be bad news for Palin …
http://andrewsullivan.theatlantic.com/the_daily_dish/2008/09/here-we-go.html
# 115
Gary,
I have seen dorm rooms with more kitchen counter space.
Treasury Bull Alive and Kicking
http://www.minyanville.com/articles/bac-fnm-fre-interest-Fed-Paulson/index/a/18819
Scary read for the Gold Bugs
So I can’t resist.
Did anybody see the R bozo on last night holding up a sign that said MAVRICK (not a typo on my part) during McMann’s speech last night. Made me laugh and realize we really haven’t gotten too much further than potatoe…..
“Tom– you don’t think tax evasion by the chairman of ways and means is newsworthy? I’m sure we would all like to knock a thousand or two off our tax bills every year for the next twenty years”
The times peice had a bit more info. He bought the place as an investment/resort for less than 90k back in the 80’s. Since then he’s made 75k in rental income.
The bi annual payments go directly towards his mortgage. Isn’t income meaningless in this scenario? I would think his net profit is what is important here.
Really unless there’s more to the story, and there might possibly be, this is nothing major.
Kettle: On affordability angle, I had produced chart for our region. See the second chart at following link.
http://www.geocities.com/skgala/newark.htm
It’s hypothetical, because it kind of assumes buying of house 1000 time OFHEO, HPI value. The idea was you are trying to compare same quality house.
RE: MAVRICK sign.
The gator and I caught it.
It’s quite amazing actually how little buzz there has been about M’s speech compared to the watercooler dialogue around SP.
I just find it interesting, but not trying to imply anything.
M also starts way too many sentences with “My friends.”
#152
http://www.law.cornell.edu/uscode/26/61.html
Please see the Tax Code definition of income above, specifically, subsection (a)(5).
One would think the man in charge of writing tax laws would be familiar with the definition of income.
John says
The 100k a year 35 yo couple who bought the run down split in 2006 for 600k with 10% down and 10K re taxes will be crushed.
Maybe I am naive but do you think a lot of people at the 100,000 a year income level purchased homes costing six times their income?
#154 M is a poor speaker, no doubt about it.
Waiting:
http://i309.photobucket.com/albums/kk392/hopereborn/mavrick.jpg
Yesterday we found out that some of us would move out to Yuma to make $50/hr picking lettuce for 3 months out of the year. I probably don’t need to be tied to this area to do what I do for the other 9 months.
I wonder, how many people in the mid 80’s would leave NYC to make $10k a year in the south side of chicago to work on “getting the city to fill potholes, provide summer jobs, or remove asbestos from the apartments or persuading the apartment managers to repair toilets, pipes, and ceilings”?
and it looks like the judge denied the motion
http://www.the-peoples-forum.com/cgi-bin/readart.cgi?ArtNum=4301
meaning if there’s something juicy in those court documents … we’ll find out.
http://www.mybudget360.com/you-cannot-afford-a-350000-home-with-a-75000-household-income/
Withb respect to the flat tax. Almost any tax system develops “loopholes” if only because they are necessary to promote “desired” behavior. We save nothing as a nation, and this means we lack the capital here to finance our own government. The current tax system and a flat tax system discourage savings, inasmuch as for each $ earned in interest a chunk comes out for taxes.
If there were a flat tax that exempred not only a threshhold number of dollars earned overall but also an exemption for the first x dollars of interest, and even the first x number of dollars in capital gains and dividends, it would encourage savings and investments, without providing an outsized benefit to the very rich.
If there were, say, a flat tax on all income earned above the first $15k in wages ($30k per couple), exempt the first $1-5k in interest and diviend income, and the first $20k in capital gains (or some other agreed-upon numbers), it would encourage folks to stash away some cash, and to try and make a few bucks through various investments. The idea of exempting the first $X of any type of income would in fact benefit the middle class — and that is why it will never happen.
Maybe I am naive but do you think a lot of people at the 100,000 a year income level purchased homes costing six times their income?
John, the peak median house price to income ratio in Bergen County NJ was 5.63 so yeah. I don’t think your example is too far off.
victorian,
Skeptic nailed it. In a flat tax scenario you usually set a base amount that no-one gets taxed on.
# 152 “The bi annual payments go directly towards his mortgage. Isn’t income meaningless in this scenario? ”
No. NO. NO!!!!!!!!!!! If he declared his income, like the rest of us, he would be paying down his mortgage with after-tax funds. By cheating — well breaking the law, it appears — and not declaring the income, he got to pay with pre-tax (tax free) dollars. I notice it says he will be refiling disclosure forms. WHat about tax forms?
156 Renter, I think a lot of $100k people did buy those $600k homes, because they were going to be worth $700k by now, or because Suzanne researched it. Maybe not a lot, bt enough that when
Thanks Skep-tic. Things are much clearer now :).
man, the palin scandals are starting to add up
the firing of the police chief
Palin’s husband allegedly got advisor fired for dating the wrong woman
and now some new scandal in the divorce records?.?.?.?.?
did McKain fire his vetting team yet?
And the financials go green – anyone see any helicopters??
SO how much would Rangel owe on 75K in back taxes, penalties and interest? anyone?
Sometimes I think we should get rid of personal income tax all together.
Only tax business entities, including small businesses. It eliminates the problems of double taxation, reduces the number of returns filed which can dramatically cut down on the size of the IRS.
Wages will drop but the take home can stay the same.
Sole proprietorships and above will have to keep filing taxes but things can be simplified there.
It’s not really a burdon on businesses as they’re paying the taxes for their employees anyway. The would just give it directly to the government instead of to their employees first.
Oh wait. Most people have tax witheld from their paycheck and file a return to get that money back anyway. We’re pretty much already there, we just have this whole expensive beuracracy set up to do it.
170 Ket –
The guy sucks at cheating! 75K, c’mon, we can do better than this. Yes, we can!
btw, how much would mc-same and cindy save by eliminating estate tax?
Happy Birthday Grim.
And a Happy Bank Death Watch Friday to All.
Could we see Citi or Wamu crumble today?
# 170
The question I have is, who believes that, with a property that gets $1,000/night that he was earning just a few thousand/year?
The penalties can be pretty large. Perhaps a tax atorney amongst us can weigh in. The interest rate isnt prim either. It would not surprise me to see the penalties and int to equal (or exceed) the tax.
Grim,
Happy BD. I hope Kettle, Clot, and John are able to get a big cake with someone to jump out for you; maybe Moz, offering everyone in th room “easy terms.”
prim=prime, at least today it is
Tom,
I agree 100%
Kill personal income taxes. Kill the beast that is government by starving it.
happy bday grim
http://tinyurl.com/6rg4x9
vpilf analysis:
http://www.cnbc.com/id/15840232?video=843785638&play=1
Shore,
I had the same concerns that $75k doesn’t seem like a whole lot. I think there’s possibly more to the story than what we’ve seen.
According to the NYT story, the way that resort works (from what I remember) is the owners get 80% of the rent and the resort gets the rest. From the owners cut taxes and other local fees are subtracted so in the end the owners get something like less than 50%. But all the owners money gets pooled and distributed to the owners like tips in a casino. It just seems like some very convoluted time share to me.
Seems like the income he’s making might be covering 3/4 of his mortgage payments over the entire period. Looks like the value of the property has also gone up quite a bit too. So it looks like a better deal than a time share.
But I shouldn’t have to open up an amortization spreadsheet and run some other calculations to say “hey, there might be a story here” after reading a story in the paper.
recent headline
Vodka is partly to blame for Russia’s rising mortality rate and its declining population.
Let me just say, i had nothing to do with that. I was at home and my wife can verify that. In fact I am highly insulted by any such accusations! Back in the day i was an accomplished wingman and probably deserve credit for aiding in an increase in the population.
Gaotr,
will this russian scandal hurt my chances of being Secretary of Energy? or will it be a bonus as anti-russian propaganda? See that, I am tough on the russians!
kettl1e1,
I think you’re safe. My guess it’s the the lower end stuff that came in plastic bottles that looked like chandeliers that we mixed with the 69 cent “fruit drink” when we couldn’t scrape up enough change from the sofas to get the good shyte in the glass bottles.
#158 Stu,
That is too funny. Did you post that?
If you tivo’d it, could you move a few frames, and let me know if it is Quayle?
[143] John
At my firm in DC, legal assistants worked a lot of overtime. Somehow they got it in their head that if they worked over 55 hours per week, their earnings for the OT were going straight to Uncle Sam (in effect, 100% tax on all excess earnings).
I doubted the accuracy of their math but the logic was undeniable—they stopped working when they hit the point at which their taxes would increase.
The second person on the list is Matt’s wife…
http://www.askmelissanyc.com/am/index.php/bio/index/
Waiting:
Did not post it. Thanks to Google, I found someone who did ;)
[154] Stu and Gator,
“Mavrick”
I saw that too, and did a double take, then an “oh snap.” I noticed that (mercifully) the camera wasn’t on it long.
How about the guy that did the hand to the lens when someone put the camera on him. He held up and waved his hand (no pictures) and then moved away from the camera. Like that helps.
gary,
Is that the house that was talked about a while back about the european wife and the husband builder that built a 4 bedroom house with no closets?
I don’t remember all the details or who posted it.
[189]
I was in a house like that but it was in Westfield.
Builder owner. Eastern euro wife was there when I toured it, and two of the four bedrooms had no closets. Sad part was the master bed and bath were absolutely huge—complete wastes of space so you could have configured it so each room had a decent closet.
You can’t be a Maverick and spell it correctly. jUsT aX the k00l KiDz Hoo deY vOTe fOR nOW SukAZZ!
Lots of gaffs at the convention, like the Raisin poster and that time that chick on stage accidentaly said she told Congress “Thanks but no thanks to the bridge to nowhere” when in reality first she said “please” and then “thanks for the money” and then “no thanks we’re not going to build a bridge”.
My favorite story is how the federal money they got to build a highway to the bridge would have to be returned if they didn’t use it to build it. So instead of giving back the money the built the highway to an empty beach.
Isnt this a BIG FAT link in the chain to be showing weakness? I am a carry trade novice, but read this elsewhere…
<i.What makes this much more hurtful than you might think at first glance is that the borrowed yen were not just invested, they were used to leverage investment gambles 10, 20, 60 times. Which inevitably leads to the fact that if the yen appreciates 10 or 20% (or G-d forbid more) against the US dollar or the Euro, the game is over.
And that is what’s happening: the yen gains vs other world currencies. And all the players have to leave the casino, if only because they fear that the Bank of Japan will raise interest rates to, for instance, 2%. That is still very low, you’d say, but then you realize that interest rates due on borrowed yen would go up 300% if it happened.
en Rises Against Euro, Dollar as Carry Trade Unwinds on Deepening Recession Concerns
The yen climbed to the highest in more than a year against the euro on concern the credit-market slump will lead the world into a recession, prompting investors to sell higher-yielding assets funded in Japan.
The dollar fell versus the yen before a U.S. government report that will probably show employment dropped for an eighth month. The yen also jumped to a two-year high against the Australian and New Zealand dollars as investors reversed so- called carry trades after stocks and commodities slumped. The pound weakened for a ninth day versus the dollar.
“There is a big move in terms of risk aversion and we can see the yen getting stronger from here,” said Martin McMahon, a currency strategist in Zurich at Credit Suisse Group. “The world is not particularly rosy and the credit crunch and financial problems haven’t gone away. It’s not appealing to stay in carry-trade type positions.”
Japan’s currency had its seventh straight gain versus the euro as stocks and commodities around the world tumbled. The MSCI World Index fell to its worst weekly slump since 2002 and U.S. stock-index futures dropped. The UBS Bloomberg Constant Maturity Commodity Index reached a seven-month low. The yen may rise to between 103 and 104 per dollar and to 150 yen per euro in the coming week, McMahon said.
Nom,
Do you know if it ever sold?
Repost for correction
Isnt this a BIG FAT link in the chain to be showing weakness? I am a carry trade novice, but read this elsewhere…
What makes this much more hurtful than you might think at first glance is that the borrowed yen were not just invested, they were used to leverage investment gambles 10, 20, 60 times. Which inevitably leads to the fact that if the yen appreciates 10 or 20% (or G-d forbid more) against the US dollar or the Euro, the game is over.
And that is what’s happening: the yen gains vs other world currencies. And all the players have to leave the casino, if only because they fear that the Bank of Japan will raise interest rates to, for instance, 2%. That is still very low, you’d say, but then you realize that interest rates due on borrowed yen would go up 300% if it happened.
Yen Rises Against Euro, Dollar as Carry Trade Unwinds on Deepening Recession Concerns
The yen climbed to the highest in more than a year against the euro on concern the credit-market slump will lead the world into a recession, prompting investors to sell higher-yielding assets funded in Japan.
The dollar fell versus the yen before a U.S. government report that will probably show employment dropped for an eighth month. The yen also jumped to a two-year high against the Australian and New Zealand dollars as investors reversed so- called carry trades after stocks and commodities slumped. The pound weakened for a ninth day versus the dollar.
“There is a big move in terms of risk aversion and we can see the yen getting stronger from here,” said Martin McMahon, a currency strategist in Zurich at Credit Suisse Group. “The world is not particularly rosy and the credit crunch and financial problems haven’t gone away. It’s not appealing to stay in carry-trade type positions.”
Japan’s currency had its seventh straight gain versus the euro as stocks and commodities around the world tumbled. The MSCI World Index fell to its worst weekly slump since 2002 and U.S. stock-index futures dropped. The UBS Bloomberg Constant Maturity Commodity Index reached a seven-month low. The yen may rise to between 103 and 104 per dollar and to 150 yen per euro in the coming week, McMahon said.
So apparently, O worked wrote weekly articles on currency in the Business Internation Money Report when he worked at Business International Corporation.
Any of you finance guys ever look into the stuff he wrote and have any opinions?
Sounds interesting but google hasn’t been much help finding anything.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aHlLc59LsJDs&refer=home
U.S. Mortgage Foreclosures, Delinquencies Reach Highs (Update2)
By Kathleen M. Howley
Sept. 5 (Bloomberg) — Foreclosures accelerated to the fastest pace in almost three decades during the second quarter as interest rates increased and home values fell, prompting more Americans to walk away from homes they couldn’t refinance or sell.
New foreclosures increased to 1.19 percent, rising above 1 percent for the first time in the survey’s 29 years, the Mortgage Bankers Association said in a report today. The total inventory of homes in foreclosure reached 2.75 percent, almost tripling since the five-year housing boom ended in 2005. The share of loans with one or more payments overdue rose to a seasonally adjusted 6.41 percent of all mortgages, an all-time high, from 6.35 percent in the first quarter.
Tumbling home prices are making it difficult for even the most creditworthy owners with adjustable-rate mortgages to sell or get a new loan as their financing costs rise, said Jay Brinkmann, MBA’s chief economist. Prime ARMs accounted for 23 percent of new foreclosures and subprime ARMs were 36 percent, he said.
“People chose the lowest payment option to get into some of the very expensive housing markets and now that prices are coming way down, they can’t sell and they can’t afford the higher payments,” Brinkmann said in an interview.
The three-year-old housing slump has slowed growth of the world’s largest economy, caused more than half a trillion dollars of losses at banks such as Citigroup Inc. and UBS AG, and crimped earnings for companies such as Home Depot Inc. and Lowe’s Cos. that rely on home purchases to fuel demand.
Economic Growth
The drop in home sales and values, along with tighter credit conditions and higher energy costs, probably will “weigh on economic growth over the next few quarters,” Federal Reserve policy makers said Aug. 5 when they decided to hold their benchmark rate at 2 percent. The central bankers cut the rate seven times in the last year in an attempt to avert a U.S. recession.
The Fed probably will keep the rate level for the next few months, according to the price of Fed funds futures. There’s an 81 percent chance of no change at the Sept. 16 meeting and a 75 percent chance of no action at the Oct. 29 meeting, they indicate.
Foreclosures started on prime mortgages rose to 0.67 percent from 0.54 percent and the foreclosure inventory increased to 1.42 percent from 1.22 percent, the report said. The share of seriously delinquent prime mortgages was 2.35 percent, up from 1.99 percent.
Prime Mortgages
The share of new foreclosures on prime ARMs was 1.82 percent, triple the 0.58 percent in the year-earlier quarter, and the total foreclosure inventory was 4.33 percent, up from 1.29 percent, the report said. The share of seriously delinquent prime ARMs was 6.78 percent, rising from 2.02 percent a year ago.
New foreclosures on subprime loans rose to 4.7 percent from 4.06 percent in the first quarter, according to the report. The total foreclosure inventory increased to 11.81 percent from 10.74 percent and the so-called seriously delinquent share of loans that are 90 days or more overdue rose to 17.85 from 16.42 percent.
The bankers’ report cites percentages without providing the number of mortgages. The U.S. had $10.6 trillion of outstanding home loans at the end of March, according to a June 5 report by the Federal Reserve. Mortgage lending fell to $320.9 billion in the first quarter, down from $782.6 billion a year earlier, the Fed report said.
Existing home sales fell to a 10-year low in the second quarter and the median price for a single-family house dropped 7.6 percent, according to the National Association of Realtors in Chicago.
Market Bottom
Tumbling prices and foreclosure sales by banks may be helping to form a bottom for the housing market, said Brian Bethune, chief U.S. financial economist at Global Insight Inc. in Lexington, Massachusetts.
“People who have been waiting on the sidelines — and there have been quite a number of them — are starting to see prices come down to the point where they perceive good value,” Bethune said in an interview. “Foreclosures do provide opportunities and induce some people to come back into the market.”
Sales of previously owned homes rose 3.1 percent in July to an annualized pace of 5 million, boosted by foreclosures that accounted for about a third of all transactions, the National Association of Realtors said in an Aug. 25 report.
The Mortgage Bankers report is based on a survey of 45.4 million loans by mortgage companies, commercial banks, thrifts, credit unions and other financial institutions.
To contact the reporter on this story: Kathleen M. Howley in Boston at kmhowley@bloomberg.net.
This will be good news for RE in the tri-state region:
http://www.bloomberg.com/apps/news?pid=20601087&sid=a7_nACEQnBlQ&refer=home
HSBC Chief Green Sees Financial Market Power Shifting to East
By Doug Alexander
Sept. 5 (Bloomberg) — HSBC Holdings Plc Chairman Stephen Green sees financial markets shifting irreversibly toward Asia as emerging markets grow faster than the rest of the world economy.
Wall Street “will no longer be the center of the universe,” and while London won’t shrink, it’s likely to lose market share, Green said today during the Spruce Meadows Changing Fortunes roundtable in Calgary. He singled out China’s banks for good risk management and corporate governance.
Banks and securities firms around the world have reported losses of more than $500 billion tied to the subprime meltdown, according to data compiled by Bloomberg. Almost all of the damage has occurred at companies based in Europe and the U.S. Markets remain “volatile and fragile” and banks are reluctant to lend because of increased risk, Deutsche Bank AG Chief Executive Officer Josef Ackermann told the gathering.
The world’s biggest financial firms have been forced to raise more than $360 billion to replenish reserves, Bloomberg data show. Writedowns and losses at Deutsche Bank, Germany’s largest, have been $10.3 billion, while HSBC’s total $27.4 billion.
Gordon Nixon, CEO at Royal Bank of Canada, the nation’s biggest bank by assets, called conditions the worst since the Great Depression and said lack of liquidity, rather than credit quality, is a bigger issue.
Bank of Nova Scotia CEO Richard Waugh said the global credit crunch is “the worst we’ve ever seen” and that liquidity had been mispriced for years without enough regard for risk.
A multi-decade era of relatively easy credit is “over” and borrowing will be tougher, Nixon said, forcing lenders and companies that borrow to adjust their business models accordingly.
so how about that decoupling?
my resume
fter a dizzying expansion, the BRIC bubble appears ready to burst. Share prices in Brazil, Russia, India and China — the so-called BRICs — have been declining sharply because of the global credit crunch and military tensions, likely forcing Japanese retail investors to change their investment strategies.
In the past year, the Shanghai A-Share index has plunged 60%, India’s Sensex index 33%, Russia’s RTS index 32% and Brazil’s Bovespa Index 25%. These falls were triggered by the global credit crunch that stems from the subprime loan problem in the U.S. Investment funds that have suffered losses have been withdrawing their money from these emerging economies.
These nations also face the risk of inflation due to high growth, abundance of money flows and higher prices of natural resources. As a result, their central banks have tightened their monetary policies, spurring a decline in asset prices. However, there are greater issues than these economic problems. The BRICs now face increasing country risks that existed long before their recent economic ascendency…..
so how about that decoupling?
Brazil, Russia, India and China Bubble On Verge Of Collapse
fter a dizzying expansion, the BRIC bubble appears ready to burst. Share prices in Brazil, Russia, India and China — the so-called BRICs — have been declining sharply because of the global credit crunch and military tensions, likely forcing Japanese retail investors to change their investment strategies.
In the past year, the Shanghai A-Share index has plunged 60%, India’s Sensex index 33%, Russia’s RTS index 32% and Brazil’s Bovespa Index 25%. These falls were triggered by the global credit crunch that stems from the subprime loan problem in the U.S. Investment funds that have suffered losses have been withdrawing their money from these emerging economies.
These nations also face the risk of inflation due to high growth, abundance of money flows and higher prices of natural resources. As a result, their central banks have tightened their monetary policies, spurring a decline in asset prices. However, there are greater issues than these economic problems. The BRICs now face increasing country risks that existed long before their recent economic ascendency…..
Not really my resume, just a cut and paste error :{
When I was in school if I crossed $5,200 I lost 50 cents on the dollar in Fin Aid and still got hit with FICA, Payroll, Diability, income tax etc. That was the amount I would stop working on the books for. What is the point of working if you give back over $90%?
rhymingrealtor Says:
September 5th, 2008 at 12:31 pm
John,
Perhaps when you were in school you did’nt need to make more than $5200. There is a need to make more than $40,000.
KL
so how about that decoupling?
China’s Central Bank Is in Need of Capital
China’s central bank is in a bind. It has been on a buying binge in the United States over the last seven years, snapping up roughly $1 trillion worth of Treasury bonds and mortgage-backed debt issued by Fannie Mae and Freddie Mac.
Those investments have been declining sharply in value when converted from dollars into the strong yuan, casting a spotlight on the central bank’s tiny capital base. The bank’s capital, just $3.2 billion, has not grown during the buying spree, despite private warnings from the International Monetary Fund.
Now the central bank needs an infusion of capital. Central banks can, of course, print more money, but that would stoke inflation. Instead, the People’s Bank of China has begun discussions with the finance ministry on ways to shore up its capital, said three people familiar with the discussions who insisted on anonymity because the subject is delicate in China.
The central bank’s predicament has several repercussions. For one, it makes it less likely that China will allow the yuan to continue rising against the dollar, say central banking experts. This could heighten trade tensions with the United States. The Bush administration and many Democrats in Congress have sought a stronger yuan to reduce the competitiveness of Chinese exports and trim the American trade deficit…..
Kettle – You are so totally still a part of the administration.
Did anyone catch a glimpse of the building in the backdrop behind M during his speech last night?
On the left wing internets, there was a lot of speculation as to what it was. Some people even thought it might have been one of M’s countless houses.
Turns out it is actually Walter Reed Middle School in North Hollywood, CA. One would have to wonder why that would be picked by M as the backdrop for his acceptance speech. Apparently they wanted to display Walter Reed Army Medical Center, but the best and brightest in the R party can’t even manage to search for stock photos properly.
http://talkingpointsmemo.com/archives/213806.php
Nom – Have you gone totally Jersey yet? Little Nom didn’t sport any big hair on her first day of school, did she?
Anyone with MLS access able to give me info on two properties? A relative was interested in them. One was supposed to go up for auction last week but never did, the other is/was being sold by an out of state daughter after her mother passed away.
211 & 244 Elsmere in Fort Lee.
Thanks in advance
horray for a new budget crisis! hope you like potholes; and who needs salt trucks?
U.S. highway fund crushed by cutback in driving
NEW YORK (CNNMoney.com) — An unprecedented decline in driving will deplete the federal Highway Trust Fund by the end of September prompting the government to ask Congress for an $8 billion emergency infusion Friday.
Gasoline sales are crucial to maintaining the nation’s highway infrastructure. About 90% of the fund’s total revenues comes from taxes on motor fuels, according to a July report from the Congressional Budget Office.
Without the additional money, the Department of Transportation will not be able to fully reimburse states for their highway investments. Already in September, department officials are projecting getting $4.4 billion in state requests but collecting only $2.7 billion in revenues.
kettle1,
You sure it’s not all the speculators in the commodoties market buying up all the salt?
RE: BRIC
maybe this pullback is a nice buying opportunity for the long term investor
if money is tight going forward, doesn’t it make sense that creditor nations will have an advantage vs. debtor nations?
The 65 mpg Ford the U.S. Can’t Have
Ford’s Fiesta ECOnetic gets an astonishing 65 mpg, but the carmaker can’t afford to sell it in the U.S.
If ever there was a car made for the times, this would seem to be it: a sporty subcompact that seats five, offers a navigation system, and gets a whopping 65 miles to the gallon. Oh yes, and the car is made by Ford Motor (F), known widely for lumbering gas hogs.
Ford’s 2009 Fiesta ECOnetic goes on sale in November. But here’s the catch: Despite the car’s potential to transform Ford’s image and help it compete with Toyota Motor (TM) and Honda Motor (HMC) in its home market, the company will sell the little fuel sipper only in Europe. “We know it’s an awesome vehicle,” says Ford America President Mark Fields. “But there are business reasons why we can’t sell it in the U.S.” The main one: The Fiesta ECOnetic runs on diesel.
http://www.businessweek.com/magazine/content/08_37/b4099060491065.htm
Palin’s pipeline exists — but only on paper
Alaska project in speech hasn’t begun construction, could take decade
updated 7:28 p.m. ET, Thurs., Sept. 4, 2008
ANCHORAGE, Alaska – A long-delayed natural gas pipeline championed by Gov. Sarah Palin that would carry supplies from Alaska to Canada and then to the lower 48 states exists in concept only and is years away from fruition.
The vice presidential hopeful, in her speech Wednesday to the Republican National Convention, said she fought to bring about “the largest private-sector infrastructure project in North American history” to bolster America’s energy security.
“And when that deal was struck, we began a nearly $40 billion natural gas pipeline to help lead America to energy independence,” Palin said.
Story continues below ↓advertisement
But plans for the pipeline that would ship gas from Alaska’s North Slope — a project envisioned since the 1970s — remain on the drawing board.
“No, it hasn’t been started, and that’s on the record,” said Paul Laird, executive director of the Alaska Support Industry Alliance, an oil field service trade group.
No question, Palin has been a strong pipeline advocate.
Last month, the state legislature endorsed her recommendation to award TransCanada Corp a license to build a 1,715-mile pipeline to Western Canada from Prudhoe Bay. In Alberta, the gas could be diverted to the United States on TransCanada’s existing lines.
But there is no commitment to actually build it. The Canadian firm must still convince the state’s major gas producers that its project is their best bet.
Alaska officials have worked for decades to encourage construction of a line to tap the North Slope’s 35 trillion cubic feet of gas reserves and move it to markets.
Up to now, high costs and poor economics have thwarted that ambition and kept the gas stranded in the region’s oil fields. Estimates for the opening of the line are now as far away as the end of the next decade…….
http://www.msnbc.msn.com/id/26550336/
http://www.businessweek.com/magazine/content/08_37/b4099036451525.htm
Tom [189],
No, This house was built in the early 1920’s. It’s an old colonial with closets the size of toaster ovens.
#212
You do realize the massive amount of lead time involved in a project of that size, correct? There are condo developments that have taken a decade to get off the ground. This article shows a fundamental lack of understanding of the issue
[193]
Yes, after languishing for awhile, it sold. It was a beautiful house but it had a tiny back yard, one car garage, the aforementioned ill-conceived bedroom configurations, and was so far south in Brigadoon that it was nearly in Clark. Were it near the town center, or on a bigger lot, it would have fetched more than the 819 ask, but it did sell though don’t know for how much.
[205] Gator,
No, I will not go totally Jersey until the tax and motor vehicle authorities force me to. Nor will I ever suffer gladly the dubious title of “New Jerseyan.” Better Dead Than Red.
The little nom did not sport big hair, and if she starts to sound like a Jerzee Gurl, I will send her to a speech pathologist.
#213 John: They might need to revise the investment banking and financial service numbers down.
O’s lead speechwriter wrote speeches for Kerry. Wonder why we didn’t hear this in the analysis of his stadium show?
http://www.nytimes.com/2008/01/20/fashion/20speechwriter.html?_r=1&oref=slogin
Nom 217 – Well the MVC folks will force you to go Jersey within 30 days of your move.
Think of it this way, with Jersey’s national reputation, there’s no way you can get slugged by the press as an “Elite”, which was a definite possibility since you sent Little Nom to bilingual school. Going Jersey could be an electoral advantage during your quest for the WH.
kettle (192)-
Remember about a year ago, when a lot of us here (esp. BC Bob) started wondering about the unwind that would happen if the carry vs the yen started to go sour?
I’m surprised it’s taken so long.
With my monthly childcare expenses looking like around $1300 a month plus whatever summer camp will cost (hint – THOUSANDS and THOUSANDS for the summer), why did I bother going back to work?
I think this might be crazy idea week for me. Here’s another one.
NG pipelines are expensive and take a long time to produce. In addition the costs may not justify it.
LNG shipping doesn’t seem to be very cost effective either. Do any of the LNG ships actually run on NG?
Anyway, here’s my wacky plan. NG is lighter than air. Helium is a byproduct of the production of NG. Anyone ever seriously investigate transporting NG in airships? Awe crap, someone did. I need to find a new get rich quick idea.
According to this guy we’re going to need something like Pickens Plan to increase demand to keep demand high enought to justify increased production.
222 Lisoosh – If it makes you feel any better, we have friends that pay for 3 children under the age of 3 to attend fulltime day care. Just imagine what that must run!
#222 Lisooh
Do we have to dig out the posts to remind you.
Using Google Chrome for the first time and so far I like it. Beats IE and Safari, Mozilla is still holding its own.
I thought today might be a day I didn’t get moded :( Well to sum up. Great idea! Natural gas shipped via balloons since it’ slighter than air and helium is a byproduct. Booo someone already thought of it.
#222
I didn’t make very much income left over after paying for summer camp but I think of it as the necessary cost for the other nine months of the year.
“O’s lead speechwriter wrote speeches for Kerry.”
Uhm. So?
From last nights O interview with BillO
I found it interesting. Bill would ask the “tough questions”, O would respond, Bill would push again, O would give a little bit and then they would move on to the next topic. M and SP are spinning the comment on the Surge but missing the original point that he got it right on the original call to war.
Overall BillO gets to throw some meet to his base, he gets to say “Look how I asked the hard questions and look how he squirmed”. He has enough face to cover his direction shift to O neutral / supporter.
The best comment was in the talking points after, “I looked that man in the eyes and I can safely say, he’s not a wimp”. Bark Bark
#227
I don’t think it’s a big deal, except that people have been quite dismissive of Ms. P’s speech because she used a speechwriter who worked for Bush. The point is that all politicians use speechwriters and many of them use the same ones, but somehow Mr. O gets credit for being a great thinker when he reads his lines but others do not.
#81
I would support a flat tax on buisness and a consumer tax on individuals. Why do we tax labor? All taxation in punitive in nature, so I would prefer taxing purchase over labor. I would keep food and clothing (non luxury) tax free nation wide.
You know, I was pretty neutral towards O but with all the stuff coming out from people trying to attack him I’ve found a lot of stuff I like.
skep-tic, from your link…
“Life was relatively quiet then, and Mr. O– and Mr. Favreau had some time to hang out. When Mr. O–’s White Sox swept Mr. Favreau’s beloved Red Sox three games to none in their American League 2005 division series, the senator walked over to his speechwriter’s desk with a little broom and started sweeping it off.”
How do you not like a guy like that :)
#221 clot: Speaking of BC Bob, where has he been??
O’Reilly interview was and is a massive tease. He is parcelling this thing out 10 minutes at a time. It makes it very difficult to get an overall sense of Mr. O’s overall command of the issues. I do think O is smart to go on the show however. He has topped out his support among african americans, anti-war, etc and needs more middle of the road blue collar types to get over the line. that is O’Reilly’s audience
I hate this recesson. No one is selling homes or lux cars cheap yet.
The good part of being a working mom is I guess you get to be a grandmother early when your daughter gets knocked up in HS.
#234
Levi is the new K-Fed. Step aside, Spears family
#229 Skep
Today SP recycled a line from her convention speech. She used the “difference between small town mayor and a community activist”. To me that was a big mistake, that was a great line at the convention, went down well and got a lot of airtime. But it was a one shot deal. You either come up with a new angle to work it, or you leave it alone to live as the soundbite. Repeating it verbatim on the stump gives it the feel of stale bread. It make her seem as if she has nothing new to say.
Barbara,
That’s kind of how I think of it. To simplify, it’s like having to pay tax when you give your kids an allowance.
#229,
as someone who has worked with community activists in large cities, I promise you, they work harder in a day than a mayor of a town of 6,000 works in a month, oh, and they don’t get paid.
SP’s sound bite reaks of….well, it just reaks
#233 Skep
I think it is a great move. If he gets the Murdoch machine to back off, it will pull a lot of fuel from M’s fire.
Lisooh, were you in the UK in the 90’s when Murdoch pulled the Times / Sunday Times from John Major to Tony Blair.
Murdoch pulled his two biggest right wing papers into the centre to meet the candidate from the party on the left. He saw what was coming and I think he turned an inevitable Blair win into a landslide. With O he is doing the same.
If he turns Fox neutral, M’s campaign is over. The talking heads will spin their wheels in the middle but it will be interesting to see if Karl Rove stays on.
skep-tic,
You really don’t see the difference between a politician and his speechwriter that have developed a relationship from working closely together for a long period of time vs a some guy writing a speech for someone they pretty much just met? Especially when the whole convention their talking about how we need change and the speechwriter is related to the current administration.
A lot of people on the far right, and the far left seem to only think in terms of black and white and miss the important nuances. This is why there hasn’t been a successful conservative answer to The Daily Show and why some bonehead thought it would be a good idea to have Stephen Colbert roast the President.
Hey NJGator…..
As long as you’re handing out jobs in your new administration, I want to throw my hat in the ring for a spot in the Food & Drug Administration.
I’ve got plenty of experience with both!
Gator 223 – Why don’t they hire a nanny? Would probably cheaper than 3 x daycare for the under 3’s. Maybe they could find someone to cook/clean a bit too.
I can’t bear to think what it must cost them. Good paying jobs?
PGC 224 – No you don’t. Just a bit depressing to see how much flows out right after flowing in.
Google Chrome? Must investigate.
Lisoosh 242 – Yes, good paying jobs. But the Nanny thing is tricky. It’s a lot of work to care for a toddler and a set of infant twins. The toddler is 20 months older than the twins, so he needs to be interacting with kids on his own level. Also they couldn’t just get a young kid/au pair to do this job, they’d need someone mature with loads of experience who will also demand a pretty high salary. Our day care center cut them a good deal, so they figured out they were ahead of the game financially by using our day care center.
240 – Tom
“why some bonehead thought it would be a good idea to have Stephen Colbert roast the President.”
Dang! now that you mention it, I would have to see it again..for the 500th time. :).
Fiddy 241 – The Nom/Gator administration takes it’s responsibilities to the American publican seriously. Please spell out your qualifications in more detail, so that I may make an informed decision while Nom kicks back with a bottle or Bordeaux.
Thanks.
“WSJ — WASHINGTON — The Treasury Department is close to finalizing a plan to help shore up mortgage giants Fannie Mae and Freddie Mac, according to people familiar with the matter.
Precise details of Treasury’s plan couldn’t be learned. The plan is expected to involve a creative use of Treasury’s new authority to make a capital injection into the beleaguered giants.
The plan includes changes to senior management at both companies, according to a person familiar with the plans.
An announcement could come as early as this weekend.
On Friday, a series of high-level meetings were planned between Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson, the chief executives of Fannie Mae and Freddie Mac and the companies’ new regulator, the Federal Housing Finance Agency.
Treasury has been working with bankers at Morgan Stanley to use its newfound authority, granted by Congress in July, to devise a way to prop up the mortgage giants, which have been pummeled by investors in recent weeks.
The two giants are vital cogs in the U.S. housing market and their financial woes have threatened to worsen the bursting of the housing bubble.
“We are making progress on our work,” said Treasury spokeswoman Jennifer Zuccarelli. She declined to comment further on Treasury’s plans.”
246- Gator
I can say “Drill, Baby, Drill” forwards and backwards.
Can I be the energy czar?
skep-tic Says:
September 5th, 2008 at 4:21 pm
#227
“I don’t think it’s a big deal, except that people have been quite dismissive of Ms. P’s speech because she used a speechwriter who worked for Bush.”
No – people have been dismissive of Ms. P’s speeches ability to indicate her actual personality/ideals/thought processes etc. Yes all politico’s use speechwriters. However, unlike Ms. P. the other runners for P and VP have been extensively interviewed in both national mags and on national TV. They’ve all been grilled in some form or another, expecially JB and JM over the years on shows such as “Meet the Press. Ms. P. hasn’t.
Nothing wrong with reserving judgement under those circumstances.
The party machine would be well advised to actually allow somebody to speak to her rather than keeping her wrapped up in cotton.
Vic – Kettle’s already got that post locked up. Perhaps you would be interested in Secretary of the Interior?
Tom– no, I don’t see the difference. FWIW, I have a good friend who helped write speeches for GWB, Arnold, etc and is currently working for Mr. M. All of these guys are hired guns and the candidates are mainly vessels for party platforms which they can nibble at around the edges but are largely formed and survive with or without them. Mr. O is a very talented politician, but his great talent is in making himself appear transcendent, when in fact he is every bit of the machine politician.
Happy Birthday, Grim!
skep-tic Says:
September 5th, 2008 at 4:21 pm
#227 I don’t think it’s a big deal, except that people have been quite dismissive of Ms. P’s speech because she used a speechwriter who worked for Bush. The point is that all politicians use speechwriters and many of them use the same ones, but somehow Mr. O gets credit for being a great thinker when he reads his lines but others do not.
skep: I am not going to just step out and brand you as biased, but don’t you think there is a bit of a jump from O who has a personal relationship with his speechwriter, and this employee attempts to “channel O” in writing, while SP had someone who likely incorporated the detail from her RNC VP application and otherwise used standard machine rhetoric.
Honestly, I’m just trying to think rationally about this one.
Bear in mind, I must be out of step with everyone, because I found SP’s speech uninteresting and somewhat mean spirited, while I really thought MC Hammer did a good job last night, so who really knows.
PGC 240 – no, I was already out of the country when Blair was elected.
Did read that Murdoch quite liked O, or at least favors backing him.
# 248 “ake a capital injection ”
Sounds a lot like screwing the taxpayer to me.
Qualifications for FDA Cabinet Appointment-
I haven’t missed many meals, of that you can be sure.
And, as further qualification, I give you the 1971 United Nations Convention on Psychotropic Substances, Schedule I thru IV and check yes for all categories!!
Now where’s my cushy lifetime job with big gummint pension and all-inclusive health care.
251- Gator..
Secretary of the Interior – Hmm, yeah my furnishing taste is pretty good. sounds like something I can do.
Hey NJ Gator, will the Summer White House be in NJ?
Gator – what position am I in the running for in your admin?
#22 lisoosh
I’m with you on the child care dilemna. My wife’s salary just about covers daycare for our two little ones, plus food and fuel. Her benefits are really what tip the scale.
Who wants to be Secretary of HUD?
skep-tic Says:
September 5th, 2008 at 4:49 pm
Tom– no, I don’t see the difference. Mr. O is a very talented politician, but his great talent is in making himself appear transcendent, when in fact he is every bit of the machine politician.
skep: I hate to disagree and sound like a pandering fool BUT O-man IS transcendent before he even opens his mouth. It is a creidt to you that you are evaluating him on a level playing field. I think it is all he would ask of you.
shore,
is that something like a hot beef injection
[247] Gator,
I am a control freak so if you make any “informed decisions,” I will simply ask pointed questions (from my supine position with said bordeaux in hand) that demonstrate a lack of full vetting on your part, whereupon you will huffily return to the drawing board.
Ask the wife, I do this to her all the time.
I vote for John as either head speechwriter or Press Secretary for the Gator administration.
You’d never be out of the news and press conferences would sure be lively!
I had personally met previous secretary, Henry Cisneros, during Bill Clinton era. Again a true gentlemen. I am very confident, he would have not allowed situation to go bad as current one did.
Who wants to be Secretary of HUD?
#262
“Who wants to be Secretary of HUD?”
That would have to be Strawman John. He can cruise the old hoods in the new Crown Vic he picks up at the auction.
Who get INS?
i think bi would be a great candidate for INS
where did Re101 ever go?
we should get him in DHS
[222] lisoosh
It is a legit question, and one I discussed today with a former IRS agent.
We agreed that for dual earner couples where one partner’s earnings are not that high, the Odrama tax hikes will certainly cause the couple to rethink the dual earning equation, especially when the nontax factors are considered (daycare, commute costs, etc.). This is already the situation with the “marriage penalty” and we further concluded that the Odrama tax hikes constitute a stealth ramp up in the marriage penalty, particularly with respect to the payroll taxes.
fannie/freddie getting bailed out this weekend, look out below!!!!!!!!!!!!!!
unless the wife if making 200K plus a year it ain’t worth it. Plus why should dual income couples with kids get tax breaks? Why should they get paid not to watch their kids.
[266] I believe you meant to say the Nom administration. I invited Gator onto my ticket.
Like McCain, I need a hot-looking, political pit bull as my running mate.
(I can’t speak for hotness personally, but since Gator was a former beauty queen, and Stu seems to be somewhat protective, hotness is assumed).
Lisoosh-INS (unless I want to get really ham-fisted and put reinvestor in charge)
Kettle-Energy
John-EEOC
ChiFi-Treasury
barien-Ambassador to Aus.
bi-Homeland Security (prepare to be probed)
Victorian-Comptroller of the Currency
Grim-HUD
clott,
most people here think i am off the deep end, but recent headlines suggest we are setup for a global collapse, just waiting to see which support is the week one.
CF– I have said it before and I will say it now: Mr. O is John Edwards circa 2004. Both first term senators, photogenic, very good at developing thematic campaigns, both good speakers but light on substance and very liberal. Mr. O has the added advantage or difficulty (depending on your perspective) of being black. He may prove one day to be a real leader, but this, in my estimation, is who he is today.
Nom – I always envisioned my role in the Administration to be that of a Cheneyesque VP, only without the embarassing screwups.
Question away all you want, but I am sure that Stu will confirm I am a smart ass who doesn’t take crap :)
I have a pulse, can I head FEMA?
The Drudge Report has a link to a story about Bobcats taking over a foreclosed home in California.
http://latimesblogs.latimes.com/laland/2008/09/bobcats-on-a-ba.html
Some of the reader’s comments below the story are funny.
I’m not sure what position I would take up in my wife’s party, but I sure can straw man just like Rudy did a few nights ago. As long as I get to speak at the convention, I will be very convincing. The masses are asses and would eat my stuff up. I would blame everything on ‘the man’ and would end every speech with, “Remember, utopia begins with u!”
I had to take a break from you liberals for a few days and when I get back I have to read this crap. Look, you’re a woman also right? If that’s the case, why the hell are you trying to dish dirt on the historic nomination of Ms. P? You should be feeling proud that one of your gender got the nod, by noo–you let your little liberal ideaology get in the way. Ms. P is perfect for this job and yet you’re resentful. You and your young fresh faced disrespectful husband are well matched.
You know, I’m starting to feel the same disdain for O as I do for HRC. He’s nothing but an ultraliberal elitist windbag who hasn’t done a damn thing. I better not ever see any lawn signs for O in my neighborhood. Bill O of fox will deal with this punk over the next 25 days. His poll lead will disappear.
NJGator Says:
September 5th, 2008 at 9:03 am
Looks like SP has the academic credentials of W too…
Palin Switched Colleges 6 Times in 6 Years
Republican vice presidential candidate Sarah Palin seems to have switched colleges at least six times in six years, including two stints at the University of Idaho before graduating from there in 1987.
Federal privacy laws prohibit the schools from disclosing her grades, and none of the schools contacted by The Associated Press could say why she transferred. There was no indication any were contacted as part of the background investigation of Palin by presidential candidate John McCain’s campaign.
“Our office was not contacted by anyone,” said Tania Thompson, spokeswoman for the University of Idaho in Moscow.
http://abcnews.go.com/Politics/wireStory?id=5728215
I had to take a break from you liberals for a few days and when I get back I have to read this crap. Look, you’re a woman also right? If that’s the case, why the hell are you trying to dish dirt on the historic nomination of Ms. P? You should be feeling proud that one of your gender got the nod, by noo–you let your little liberal ideaology get in the way. Ms. P is perfect for this job and yet you’re resentful. You and your young fresh faced disrespectful husband are well matched.
You know, I’m starting to feel the same disdain for O as I do for HRC. He’s nothing but an ultraliberal elitist windbag who hasn’t done a damn thing. I better not ever see any lawn signs for O in my neighborhood. Bill O of fox will deal with this punk over the next 25 days. His poll lead will disappear.
NJGator Says:
September 5th, 2008 at 9:03 am
Looks like SP has the academic credentials of W too…
P Switched Colleges 6 Times in 6 Years
Republican vice presidential candidate SP seems to have switched colleges at least six times in six years, including two stints at the University of Idaho before graduating from there in 1987.
Federal privacy laws prohibit the schools from disclosing her grades, and none of the schools contacted by The Associated Press could say why she transferred. There was no indication any were contacted as part of the background investigation of P by presidential candidate John M’s campaign.
“Our office was not contacted by anyone,” said Tania Thompson, spokeswoman for the University of Idaho in Moscow.
http://abcnews.go.com/Politics/wireStory?id=5728215
“Tom– no, I don’t see the difference.”
I think that’s very sad.
Then again I also don’t understand legislators that claim to have authored legislation who are not lawyers, when such works are clearly legal documents written by legal professionals. It just makes no sense to me.
I understand that even in law firms, the top of the food chain don’t necessarily write all their own legal documents be it court motions or contracts, and that their staff generally does. But that if it wasn’t that their time was better served in other capacities, they would have the ability to author the same. As long as those doing the work for them have the same understanding of what should be written, and the person representing the work as their own can at least read, understand and correct it.
For all the negative things people say about lawyers and politicians, I think it makes sense for members of Congress to have studied and have a good understanding of Law. President and Governor I think it’s a good plus but I see those more as leadership roles.
My point is, O got a lot of praise for his 2004 speech which he wrote himself and has a history of being a good writer. But the time constraints of campaining for president don’t leave the time to write his own speeches. It looks like he has been able to work closely with his speechwriters so that they can eloquently put his words on paper and they’re not just putting words in his mouth. That was the whole point of the article you linked to.
Here’s another one on Favreau. Gives a little more detail about what he did for Kerry.
Back then Jon Favreau had one of the worst jobs on the Kerry campaign. He was the kid who put together “the audio clips”—the bundle of overnight stories that helped the campaign’s senior staff get up to speed on the latest radio news. A graduate of Holy Cross in Worcester, Mass., he had interned in Kerry’s senate office and joined the campaign right out of college.
When Kerry’s campaign showed signs of imploding—before recovering again in Iowa—Favreau was one of the few people left in the office when they needed a new speechwriter. “They couldn’t afford to hire one,” he recalled. “And they couldn’t find anyone who wanted to come in when we were about to lose to Dean. So I became deputy speechwriter, even though I had no previous experience.”
…
“What got you into politics, what got you interested?” he asked.
Favreau told him about the social service project he started in Worcester, defending the legal rights of welfare recipients as the state tried to move people off the rolls and into work.
So we’re not talking about someone that is just a good writer, he seems to have some of the same ideals. Further along in the article he explains how he writes the speeches.
“What I do is to sit with him for half an hour,” Favreau explains. “He talks and I type everything he says. I reshape it, I write. He writes, he reshapes it. That’s how we get a
finished product.
“It’s a great way to write speeches. A lot of times, you write something, you hand it in, it gets hacked by advisers, it gets to the candidate and then it gets sent back to you. This is a much more intimate way to work.”
It seems we’re not just getting some talking head politician here that’s just regurgitating what the party wants to be read. I think that’s a big part of O’s appeal.
Re -SP’s nomination as a woman is not historic. The first woman was named to a major party ticket all the way back in 1984.
Young Buck,
Just saw your post now. Thanks for the link. Kinda what I was going for in my Organic lawn care to boost curb appeal post.
Nice to see some quantitative analysis on how much landscaping can add to a home’s value. I pretty much just thought it was a given and didn’t realize there was an actual study on it.
skep-tic Says:
September 5th, 2008 at 5:17 pm
CF– I have said it before and I will say it now: Mr. O is John Edwards circa 2004. Both first term senators, photogenic, very good at developing thematic campaigns, both good speakers but light on substance and very liberal. Mr. O has the added advantage or difficulty (depending on your perspective) of being black. He may prove one day to be a real leader, but this, in my estimation, is who he is today.
skep: I wish the bulk of voters were as pragmatic as the above opinion you posited. The problem is that is not the case, and everything just escalates (or metaphorically descends) from that unfortunate fact.
CF– Thanks. Obviously, I am very biased at this point in favor of Mr. M. However, I do not wish to disrespect O supporters because he does seem to me to be a decent guy. I also think he is smart, but that he is infatuated with a left wing orthodoxy that I feel has been proven to be ineffective. I fundamentally think the problem with conservatives has been one of execution whereas liberals have a flawed philosophy.
285 –
One of the most measures of effectiveness of government is creation of jobs in the econonmy –
How do you explain this?
http://www.dkosopedia.com/wiki/Data_on_Job_Creation_by_President
Job Loss or Gain by President and Party
* (D) Roosevelt 5.3
* (D) Johnson 3.8
* (D) Carter 3.1
* (D) Truman 2.5
* (D) Clinton 2.4
* (D) Kennedy 2.3
* (R) Nixon 2.2
* (R) Reagan 2.1
* (R) Coolidge 1.1
* (R) Ford 1.1
* (R) Eisenhower 0.9
* (R) G. Bush 0.6
* (R) G.W. Bush -0.7
* (R) Hoover -9.0
#285 skeptic: what exactly is the Conservative philosophy as articulated and carried out by Bush, and to be carrie out by McCain. And I am not Liberal or Conservative, just common sense.
I think they are both full of krap.
victorian– first, I am not sure I agree with your premise. second, I would want to see which party controlled congress during those periods as well. the president can direct regulatory policy to a degree, but congress has the power to tax and spend.
thanks to the NJ McLaughlin group for the entertainment. I know I have been a bit of a loudmouth today. Enjoy the weekend.
I can’t seem to locate who mentioned it before regarding Palin and Gulliani’s comments regarding Community Organizer that elicited laughs from the crowd. It was either today or yesterday. So whoever I was trying to direct this to, I hope you find it.
I read a comment on a site this morning that I found to be the best response to what Palin and Guliani had said. Go to http://firstread.msnbc.msn.com/archive/2008/09/04/1349429.aspx and look for the comment by NancyClarkRichmondVirginia
I don’t know if it is legit or not but I can see how people might be thinking along those lines, especially the community organizers in attendance.
While I found that comment moving, Stephen Colbert’s response to Guliani’s reaction was more fun :)
Bah Humbug.
No Google Chrome for Mac.
Re: Fannie & Freddie (special for failed Friday)
From Bloomberg (after hours):
http://www.bloomberg.com/apps/news?pid=20601087&sid=aYRR0PQG3_IU&refer=home
Shore (256)-
Sounds more like an injection in the public arse to me.
Gator (262)-
Nobody. Shut it down.
Clot –
Have you seen the action on SKF/SRS after hours??
Looks like Paulson is going to save the Preferred/Bonds.
Vodka (274)-
You’ll enjoy this. I started really feeling the global collapse twitch after I read Bill Gross’ September PIMCO commentary (aka the “bail out everybody” letter), so I drafted a letter to all my company’s most recalcitrant sellers. This will be the letter I pull out a year from now to tell these folks “I told you so”. To me, the only question is when and where the first detonation occurs.
Text of letter follows:
Dear Clients of Re/Max Hills & Valley:
Below is a link to a summary of statements made today by Bill Gross, head of PIMCO. He is the most successful bond trader in US history and holds the dubious distinction of having called several recessions and two housing collapses:
U.S. Must Buy Assets to Prevent `Tsunami,’ Gross Says
http://www.bloomberg.com/apps/news?pid=email_en&refer=home&sid=aZLLPW9YEa60
Gross’ rhetoric is now much louder and more direct than in the past year. We are of the opinion that the world’s financial markets are teetering on the brink, and any spark may detonate a systemic collapse. That spark may come from the Bank of England or European Central Bank finally deciding to stop pumping billions weekly into failing, insolvent institutions in return for worthless mortgage-backed securities as collateral. Both September and October are critical months, as lenders worldwide (including Fannie Mae in the US) must attempt to “roll over” billions in notes coming due. We expect that their creditors will disallow these rollovers en masse.
Meanwhile, credit markets locally remain completely seized up. If you are not getting showing activity on your home, it is simply because there are few to no buyers for them at current prices. The few homes we are selling uniformly undercut their competitors by at least 10%. It is not enough anymore to simply be priced the same as competing homes. Our assumption is that close to 75% of all homes currently listed for sale in this area will either expire, withdraw from the market or be foreclosed. The situation IS that dire.
Believe me, I have never issued a warning like this before (not even after 9/11), and I hope I never have to do it again. My best advice to any of our sellers at this point is to take all action necessary to sell and close by the end of October…or face an increasing possibility of not being able to sell at all (or only being able to sell at extreme discount prices) anytime in the forseeable future.
The complete September, 2008 investment outlook by Bill Gross is attached to this e-mail as an Adobe file.
If you would like to discuss this in more detail, I can be reached anytime at the contacts below.
Roosevelt who had the most jobs had an overwhelmingly majority of Democrats in congress. Both houses, at some points winning more than 2/3rd of the seats in each house.
Hoover who served from 1929-1933 saw the greatest loss of jobs. From 1920-1931 the republicans controlled both houses.
While (D) Truman 2.5 was in office for 8 years, 6 were Dem majority.
From 1954-1980 the Dems dominated both houses of congress so thats.
(R) Eisenhower 0.9, (D) Kennedy 2.3, (D) Johnson 3.8, (R) Nixon 2.2, (R) Ford 1.1, (D) Carter 3.1
After the Iran Hostage Crisis, Repubs gained more seats in the senate for (R) Reagan 2.1 but Iran Contra gave control of the senate back to the dems during (R) G. Bush 0.6
In 94 both houses turned blue “thanks in part to: 1) Presdinet Clinton’s temporary failure to establish universal health care; and 2) Republican Congressman Newt Gingrich’s Contract with America, which was promoted heavily by the entire Republican Party” as (D) Clinton 2.4 and (R) G.W. Bush -0.7 served
This notion some people have that you need oposition between the white house and congress doesn’t seem to hold up. The only 2 presidents with job losses were republicans that mostly dealt with a republican congress. When there was a dem pres and congress we saw the most job gains.
The whole concept of fighting to achieve progress doesn’t make sense. It’s like two teams fighting in a tug of war they know they won’t win. The flag just moves an inch or two in each direction. If we could just find the middle, where most of us live in, we could use all that energy fruitlessly used to pull on a rope and instead use it to clear a safe path through the mountains of problems that surround us.
vic (293)-
Like Nero tuning up his fiddle while Rome begins to burn.
The Phony/Fraudy show has begun. It’s like going to a bad movie…a bad movie where a pal of yours has already told you how it ends.
296- Clot
This will be the biggest heist pulled on the tax payer ever, if Paulson bails out Bill Gross and his banking buddies.
Whoever is the next pres, should send him to jail for this.
This is going to be a very long weekend.
Gator/Nom
Might there be a position for making people talk? I am very experienced in this area in both friendly and non-friendly ways (depending on how you look at it). Perhaps something like an inquisitor in counterterrorism?
Lisoosh
I just got a Mac. I am very happy I made the move, even if we can’t have Google Chrome.
Writning in from Ireland, seems the housing crash has hit hard here, and there are about 30K empty new homes on the market and huge amounts of new commercial space.
My Cousin wants to sell the his pub, seems the day drinkers usually the construction workers has vanished entirely in the last 12 months.
Seems every seller here has taken the credit crash news to heart and have dropped their asking prices ala the California markets.
When I quote the prices of new homes back in NJ, I get a look of disbelief.
What has been a good 14 years of Growth by the Celtic Tiger is officially over.
lost (298)-
That is a blatant attempt to bait a PVC comment out of me.
I’m not biting.
“I fundamentally think the problem with conservatives has been one of execution whereas liberals have a flawed philosophy.”
And that’s what it seems most of your party believes in as well, which is their problem. It’s not the execution, it’s what they’re trying to execute. The more middle of the road candidates that could easily win the general election won’t be able to win the party nomination. Look at Guliani. Even McC had to change drastically to win the nomination. He is no longer the Mavrick(sic) he used to be.
Take gun control, I’m more with the notion that it’s a local issue. In some big cities where gun violence is a problem there should be different rules but I’m all for people owning guns. I am for background checks and registration though and possibly requiring some sort of testing just like we do with drivers licenses. Guns are powerful and dangerous and people should show they can treat them with respect.
Abortion/abstinence/birth control, I’ve long believed in what O has said. That people that make the decision to have an abortion don’t make the decission as flippantly as some on the right seem to think. Teenagers need to learn about sex and birth control and abstinence and even the wonders of self pleasure. One day you wake up and you want to do things with your body you can’t understand, you need someone to help you through that. You need to know if you’re going to have sex you need protection from pregnancy and disease and that those protections only reduce the risk. Abstinence is the only way to eliminate the risk and don’t worry about going blind or hairy palms.
Death penalty. I’m all for it. In fact, I don’t even care how humane it is in some cases. I’m all for letting an angry mob spend days beating someone to death with wiffle ball bats if the crimes are heinous enough. But, I want to know we have properly trained law enforecement that opperates within the confines of the law and a fair legal system that ensures everyone gets a fair trial. The number of overturned life sentences since the advent of DNA is disturbing. I’m with Blackstone that it’s better for 10 guilty men to go free than for 1 innocent man to be punished.
The whole Terri Schiavo thing got under my skin and left a bad taste in my mouth for both the Republicans and media. At the time I had a family member in a similar situation. What I would have liked to hear is how much time each side had spent with Terri helping her in her rehabilitation, or help her try and enjoy her life. It disgusted me that people actually sent her husband death threats after all he’s been through. Or even bringing up his new kids and wife when his Terri’s family encouraged him to get on with his life.
The throngs of people lined up outside her hospital who came from all over disgusted me the most. There are thousands of families all over the country in similar situations. How many of these people volunteer locally to even just sit with someone and talk or watch tv so their family could spend a day running errands or catching up on sleep without worrying that their loved one is all alone. I bet not many if any as it’s hard enough to get family to help.
Go visit a long term care or rehab facility. Other than the staff and the ocassional family member, the halls are usually empty. People who make these life and death decisions for their loved ones agonize over it. People who have not experienced that have no right to interfere. Until you’ve spent months and years watching someone you love go from a vibrant, active individual to someone that can’t even get out of bed on their own, you have no right to voice your opinion. If you have never spent countless drives wondering if today will be a good day and they’ll take a few extra steps or say a few words, or if they’ll just be screaming in pain, you have no right to voice your opinion.
Life is complicated, it’s not black and white. The extreme left and right want us to believe it is because all we have time for in our busy lives are to listen to a few sound bites here and there.
OK-
Here is Hank’s bazooka –
“Under the plan, the federal government would place the firms in a legal state known as conservatorship, the sources said. The value of the company’s common stock would be diluted but not wiped out while the holdings of other securities, including company debt and preferred shares, would be protected by the government.”
The preferred is protected!!! Damn, SKF, it was good knowing ya…
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/05/AR2008090503351.html
Clot
That was not directed at you. But since you answered, I already told you I am over PVC. I am only interested in latex.
303#, SKF may not move exactly opposite to FNM/FRE. look at after-hour trading after bailout-news, SKF down to $106 after bailout since people think the banks may benefit from the bailout
yea and her husband was in the mafia.
NJGator Says:
September 5th, 2008 at 5:45 pm
Re -SP’s nomination as a woman is not historic. The first woman was named to a major party ticket all the way back in 1984.
294# clot, your grammar is not that great.
He was.
>He is the most successful bond trader in US history and holds the dubious distinction of having called several recessions and two housing collapses:
Fannie/Freddie bailout:
Time to start the printing press. Time for hyperinflation. It is going to suck big time!
305 – bi
Thats what I meant.
I cannot imagine the crap that the gubmint is gonna find in those 2 zombie companies. That 800 billion ain’t gonna be enough.
sigh……
All Paulson has done is continue the great delay. Markets might behave irrationally in the short term, but the long term trend smooths out the short term bumps. Will be buying gold soon. Just not yet. Still praying I can get it for closer to 700 than to 800. The continued bailing out of the wealthy sickens me. F them! They already get all the breaks. 20 years from now, GWB will make Jimmy C. look like JFK.
The depression is coming folks. But only if you make 250K or below. The rest will get bailed out by the crooks in the White House and the Fed and the Treasury. What party does Paulson belong to. Anyone know?
“What party does Paulson belong to. Anyone know?”
– Goldman Sachs??
“What party does Paulson belong to. Anyone know?”
– Goldman Sachs??
Amen Victoria, amen,,,
One other thing; this is a bailout of China, Japan and Russia, period.
313 – All Hype
If the preferred is guaranteed, it is a bail out of the all the banks as well.
If the preferred is guaranteed, it is a bail out of the all the banks as well.
____________________________________________
Thanks for the information. Learn something new every day.
304 lost,
smart girl. the way latex hugs curves and accentuates the graceful catlike movements of the fairer sex just cant be beat by PVC. Then again a spanking never sounded so satisfying when done on latex vs PVC.
Vic, ALlhype
Yes this is where the fecal matter hits the fan, the F&F bailout is going to cost trillions, not billions. best case is 3-5 trillion. worst case is 10.
This will also be the beginning of rapid deflation! the quick and dirty of it being that even if the FED and treasury pump 5 billion into the market, the other foriegn central banks are not willing to do so. When places like spain and ireland hit the wall what credit is left globally will rapidly evaporate and with it will go astronomical sums of money. at that point the US dollar will either collapse as a currency or rapidly deflate. Current global derivatives are estimated at 1 QUADRILLION, 1,000 Trillion, that is 15 times the global GDP of 65 trillion. time to deleverage, buckle your seat belt!
The Bank of International Settlements, which seems to be the only institution that tracks the derivatives market, has recently reported that global outstanding derivatives have reached 1.14 quadrillion dollars: $548 Trillion in listed credit derivatives plus $596 trillion in notional/OTC derivatives.
http://jutiagroup.com/2008/07/24/global-derivatives-market-now-valued-at-114-quadrillion/
oops
FED and treasury pump 5 billion
should be
FED and treasury pump 5 TRILLION.
hard to keep all these 0’s in order
Kettle
You surprise me. Naughty boy.
Anyway, looks like we’re heading down to NOLA in Feb., if it hasn’t washed away. That would make for a fun gtg.
SURPRISE!
Bank failure friday….
On September 5, 2008, Silver State Bank, Henderson, NV was closed by the Nevada Financial Institutions Division. Subsequently the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.
All insured non-brokered deposit accounts at the Nevada branches have been transferred to Nevada State Bank, Las Vegas, NV. For more information on Nevada State Bank visit us at http://www.nsbank.com.
All insured non-brokered deposit accounts at the Arizona branches have been transferred to National Bank of Arizona, Tucson, AZ. For more information on National Bank of Arizona visit us at http://www.nbarizona.com.
The FDIC has assembled useful information regarding your relationship with Silver State Bank. Besides a checking account, you may have Certificates of Deposit, a business checking account, a Social Security direct deposit, and other relationships with the institution.
SURPRISE!
Bank failure friday….
On September 5, 2008, Silver State Bank, Henderson, NV was closed by the Nevada Financial Institutions Division. Subsequently the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.
All insured non-brokered deposit accounts at the Nevada branches have been transferred to Nevada State Bank, Las Vegas, NV. For more information on Nevada State Bank visit us at http://www.nsbank.com.
Nom and Gator,
I don’t want one of these one shot single administration jobs, I like to look more long term. While the lack of a law degree may bar my application to chief justice, (a great job were you can’t be fired) I would have to decline it as I would like a more long term, higher paying gig.
I think my talents are best served as Senate Minority leader. I can make sure your reign is long and can make enough gravy off the lobby train to set me up for life.
nice post
victorian Says:
September 5th, 2008 at 7:07 pm
285 –
One of the most measures of effectiveness of government is creation of jobs in the econonmy –
How do you explain this?
http://www.dkosopedia.com/wiki/Data_on_Job_Creation_by_President
Job Loss or Gain by President and Party
* (D) Roosevelt 5.3
* (D) Johnson 3.8
* (D) Carter 3.1
* (D) Truman 2.5
* (D) Clinton 2.4
* (D) Kennedy 2.3
* (R) Nixon 2.2
* (R) Reagan 2.1
* (R) Coolidge 1.1
* (R) Ford 1.1
* (R) Eisenhower 0.9
* (R) G. Bush 0.6
* (R) G.W. Bush -0.7
* (R) Hoover -9.0
Kettle: (319)
http://news.yahoo.com/s/ap/20080906/ap_on_bi_ge/bank_closure_silver_state_2
Another 500 Million dollars of the FDIC’s reserves down the drain.
WASHINGTON – Nevada regulators have shut down Silver State Bank. It was the 11th failure this year of a federally insured bank.
ADVERTISEMENT
The Federal Deposit Insurance Corp. was appointed receiver of the bank, located in Henderson, Nev. It had $2 billion in assets and $1.7 billion in deposits as of June 30.
The FDIC said Friday the bank’s insured deposits will be assumed by Nevada State Bank of Las Vegas. Its branches will reopen Monday as offices of Nevada State Bank in Nevada and National Bank of Arizona in Arizona.
The FDIC estimated its resolution will cost the deposit insurance fund between $450 million and $550 million.
What scares me most, is that I agree with a lot of this.
http://www.drlaurablog.com/2008/09/02/sarah-palin-and-motherhood/
galgon,
whats a 1/2 billion amongst friends? really now, you would think you were a common many by the way you speak.
Bergenfield Comp Killer!
SOLD: 71 E JOHNSON AVE $389,900 8/5/2005
SOLD: $270,000 8/29/2008
Bergenfield Comp Killer!
141 W CLINTON AVE
SOLD: $380,000 6/19/2006
SOLD: $330,000 8/29/2008
Closter Comp Killer!
19 COLLINS AVE
SOLD: $1,500,000 6/4/2007
SOLD: $1,400,000 8/28/2008
Emerson Comp Killer!
13 PINE DR
SOLD: $390,000 5/2/2007
SOLD: $230,000 8/27/2008
Englewood Comp Killer!
401 N WOODLAND ST
SOLD: $2,250,000 4/4/2007
SOLD: $1,931,000 9/3/2008
Engelwood Cliffs Comp Killer!
114 ROBERTS RD
SOLD: $2,000,000 1/27/2003
SOLD: $1,890,000 8/29/2008
Mahwah Comp Killer!
290 MILLER RD
SOLD: $540,000 9/30/2004
SOLD: $495,000 8/22/2008
Mahwah Comp Killer!
26 HIGH ST
SOLD: $970,000 5/30/2006
SOLD: $910,000 8/28/2008
Midland Park Comp Killer!
257 VREELAND AVE
SOLD: $540,000 12/15/2005
SOLD: $520,000 8/29/2008
Philadelphia Inquirer is reporting that the govt. is seizing Freddie and Fannie over this weekend.
How is that for bank failure Friday?
http://www.philly.com/philly/hp/news_update/20080905_ap_govtmaysoonbackfanniefreddie.html
Sorry, I didn’t read through the posts.
Already reported>>>
Clotpoll.
I respect your expertise and I wanted to know what % off peak do you think NNJ will be come next summer?
something bush and friends should have read
The Medvedev Doctrine and American Strategy
http://defence-data.com/current/page40964.htm
and
Iranian Trump Card. Russia Can Take Control of Persian Gulf
http://www.globalresearch.ca/index.php?context=va&aid=10032
Ok,
Here’s one for laughs. Straight outta Planet ‘Clair.
http://www.realtor.com/search/listingdetail.aspx?ctid=79571&typ=5&sid=a456be798bf941cdbf23f81c9f707bbe&pg=6&lid=1102872696&lsn=59&srcnt=167#Detail
no address listed but I’m thinking the corner of Kidtoucher Blvd and Blowyourbrainsout Pike
This latest bailout is so sickening, it’s unreal. So many CEOs, regulators, and folks entrusted to keep things from going completely off the rails couldn’t even manage a modicum of restraint. If this wasn’t a complete and utter systemic failure, don’t know what could possibly qualify.
And, when the best Bill Gross can do (after actually identifying the risk) is to call for more bailouts, we’ve reached a pathetic new low on the way to nuclear meltdown. I found it amusing he actually admitted they were “early” aka underwater on their distressed MBS purchases earlier this year.
Investors are buying financials on this news? Please. I’ll re-up SKF just on protest alone. F— them all for destroying our country, and the millions of people in current and future generations that will inevitably suffer.
I keep looking for a reason to believe I’m too pessimistic, a reason for many of us to be proved wrong, but it just ain’t happening. The water has long ago left the beach, and the tsunami just keeps building.
Just a crazy late night thought. Maybe we could crank call realtor offices and post MP3s of the conversations. You know, lots of “does it come WITH crackhead zombies roaming the streets?”
“Will the seller POLISH the Archie-Bunker Piss-Yellow linoleum floors to a gleaming shine by closing?”
you get the idea
SG Says:
September 5th, 2008 at 5:00 pm
I had personally met previous secretary, Henry Cisneros, during Bill Clinton era. Again a true gentlemen. I am very confident, he would have not allowed situation to go bad as current one did.
_________________
SG, all due respect, are you kidding?? He was board member of COUNTRYWIDE
http://seekingalpha.com/article/51289-countrywide-s-henry-cisneros-was-a-useless-board-member
READ ALEEERT !!! FANNIE MAE and FREDDIE MAC Common stock will be worth little to nothing after the government’s actions
http://news.yahoo.com/s/ap/mortgage_giants_crisis;_ylt=Aj0SUPQQoIAAlZ56zNhZPHis0NUE
“The news, first reported on The Wall Street Journal’s Web site, came after stock markets closed. In after-hours trading Fannie Mae’s shares plunged $1.54, or 22 percent, to $5.50. Freddie Mac’s shares fell $1.06, or almost 21 percent, to $4.04. Common stock in the companies will be worth little to nothing after the government’s actions.”
An interesting situation . . . our house in Livingston has been on the market since April. We started at 999,999. We’ve reduced three times and now at 865. Every single interested buyer has been Chinese. Great. But they come in with offers that have me perplexed – perhaps it’s a different way of looking at things. At 999 we got 825 and 850. At 925 we got 850. We countered at 895 and he went away. Now at 865 we have gotten two at 800. When we’ve countered – from 865 to 855, we got 805!!!!! Someone out there have any ideas?
U.S. to take control of Fannie and Freddie: reports
WASHINGTON/NEW YORK (Reuters) – The U.S. government plans to put government sponsored mortgage finance companies Fannie Mae (FNM.N) and Freddie Mac (FRE.N) under federal control, the New York Times and Washington Post newspapers reported late Friday, in what could be the largest financial bailout in the nation’s history. The two government sponsored enterprises (GSEs) own or guarantee almost half of the country’s $12 trillion in outstanding home mortgage debt.
For those who want to surf web without any Advertisements, I found this really cool Addon to Firefox browser.
If you have firefox, just visit this link and click install. This really works. The sites look so much cleaner.
https://addons.mozilla.org/en-US/firefox/addon/1865
Grim,
This week’s report from the hinterlands…
Hunterdon County Comp Killers:
Note: There were only 11 closed sales in Hunterdon County last week. Two made the list…
MLS#: 2506481
43 LA COSTA DR
Clinton Twp
SLD: 03/04/04 $385,000
OLP: 04/09/08 $400,000
SLD: 09/05/08 $332,500
DOM: 85
And for a special birthday surprise – a doubleheader! Comp Killer and Lowball rolled into one…
MLS#: 2542380
3 COVERED BRIDGE RD
Delaware Twp
SLD: 08/12/05 $965,000
OLP: 04/09/08 $1,149,000
LLP: 06/27/08 $1,059,000
Withdrawn
OLP: 06/28/08 $899,000
SLD: 09/02/08 $899,000 (250K under 1st OLP)
DOM: 38
Happy Birthday, Grim!!!
Stockette
Yes the idea is you’re overpriced. You should have taken the 850. Now you’re getting the best at 805? Take it before you’re offered no better then 750.
#344 Stockette
Suggest you read Clotpoll’s comment at #294. He said it way better than I could.
Good luck.
#344
The polite answer is “If you have an offer on the table, take it” Be very nice and be ready to give up another $20K between now and closing”
vic (303)-
Paulson’s actions- if they occur as predicted- will only intensify the degree of the crash when it happens.
I’m turning Japanese. I even have a hankering for cold fish and rice for breakfast.
bi (307)-
“294# clot, your grammar is not that great.”
Since when did you become Shakespeare?
““What party does Paulson belong to. Anyone know?”
– Goldman Sachs??
Amen Victoria, amen,,,
One other thing; this is a bailout of China, Japan and Russia, period.”
You forgot the hedge funds in the Caymans.
Government may soon back troubled mortgage giants By ALAN ZIBEL, AP Business Writer
58 minutes ago
http://news.yahoo.com/s/ap/20080906/ap_on_bi_ge/mortgage_giants_crisis
WASHINGTON – The government is expected to take over Fannie Mae and Freddie Mac as soon as this weekend in a monumental move designed to protect the mortgage market from the failure of the two companies, which together hold or guarantee half of the nation’s mortgage debt, a person briefed on the matter said Friday night.
Some of the details of the intervention, which could cost taxpayers billions, were not yet available, but are expected to include the departure of Fannie Mae CEO Daniel Mudd and Freddie Mac CEO Richard Syron, according to the source, who asked not to be named because the plan was yet to be announced.
Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson and James Lockhart, the companies’ chief regulator, met Friday afternoon with the top executives from the mortgage companies and informed them of the government’s plan to put the troubled companies into a conservatorship.
The news, first reported on The Wall Street Journal’s Web site, came after stock markets closed. In after-hours trading Fannie Mae’s shares plunged $1.54, or 22 percent, to $5.50. Freddie Mac’s shares fell $1.06, or almost 21 percent, to $4.04. Common stock in the companies will be worth little to nothing after the government’s actions.
The news also followed a report Friday by the Mortgage Bankers Association that more than 4 million American homeowners with a mortgage, a record 9 percent, were either behind on their payments or in foreclosure at the end of June.
That confirmed what investors saw in Fannie and Freddie’s recent financial results: trouble in the mortgage market has shifted to homeowners who had solid credit but took out exotic loans with little or no proof of their income and assets.
Fannie Mae and Freddie Mac lost a combined $3.1 billion between April and June. Half of their credit losses came from these types of risky loans with ballooning monthly payments.
While both companies said they had enough resources to withstand the losses, many investors believe their financial cushions could wither away as defaults and foreclosures mount.
Many in Washington and on Wall Street hadn’t expected Paulson to intervene unless the companies had trouble issuing debt to fund their operations.
This summer, Congress passed a plan to provide unlimited government loans to Fannie and Freddie and to purchase stock in the two companies if needed.
Critics say the open-ended nature of the rescue package could expose taxpayers to billions of dollars of potential losses.
Supporters, however, argue the Bush administration had little choice but to support Fannie and Freddie, which together hold or guarantee $5 trillion in mortgages — almost half the nation’s total.
Representatives of Fannie and Freddie declined to comment on the government assistance plan.
Treasury spokeswoman Brookly McLaughlin said officials “have been in regular communications” with Fannie and Freddie, but refused to comment saying, “We are not going to comment on rumors.”
Concern has been growing that a government rescue of Fannie and Freddie could not only wipe out common stockholders, but also be costly for scores of investment, banking and insurance companies that hold billions of dollars in their preferred shares.
Paulson has been in contact in recent weeks with foreign governments that hold billions of dollars of Fannie and Freddie debt to reassure them that the United States recognizes the importance of the two companies.
The two companies had nearly $36 billion in preferred shares outstanding as of June 30, according to filings with the Securities and Exchange Commission.
Mudd, the son of TV anchor Roger Mudd, was elevated to Fannie Mae’s top post in December 2004 when chief executive Franklin Raines and chief financial officer Timothy Howard were swept out of office in an accounting scandal. Syron was named Freddie Mac’s CEO in 2003, replacing former chief Gregory Parseghian, who was ousted in after being implicated in accounting irregularities.
He formerly was executive chairman of Thermo Electron Corp., a Waltham, Mass.-based maker of scientific equipment, served head of the American Stock Exchange and was president of the Federal Reserve Bank of Boston in the early 1990s.
Fannie Mae was created by the government in 1938, and was turned into a shareholder-owned company 30 years later. Freddie Mac was established in 1970 to provide competition for Fannie.
A government takeover could cost taxpayers up to $25 billion, according to the Congressional Budget Office.
But the epic decision highlights the size of the threats facing the housing market and the economy. On Friday, Nevada regulators shut down Silver State Bank, the 11th failure this year of a federally insured bank. And earlier this year, the government orchestrated the takeover of investment bank Bear Stearns by JP Morgan Chase.
___
AP Business Writers Martin Crutsinger and Jeannine Aversa contributed to this report.
vodka (316)-
I keep having two thoughts:
1) Is this the spark we’ve been anticipating?
2) Does anyone who works at Treasury have any understanding of the phrase, “unintended consequences”?
FDIC Bank Foreclosure Streak: Batting .667 on Fridays
After a cold streak in early August where it missed closing banks two Fridays in a row, the Federal Deposit Insurance Corporation is en fuego. It has closed U.S. banks three of the last three Friday nights, including tonight’s announcement that Silver State Bank (SSBX) of Henderson, NV, joins the list.
If you go all the way back to July 11th of this year, the Fed has closed banks on 6 of the last 9 Fridays. That works out to a 0.667 failed-bank batting average, which is darn respectable. Now that the FDIC has started hitting for average rather than going only for homeruns — we haven’t had another multi-billion dollar IndyMac — I’m expecting the FDIC can keep this hitting pace up for some time.
Go guys, go.
http://seekingalpha.com/article/94187-fdic-bank-foreclosure-streak-batting-667-on-fridays
Teaneck Comp Killer!
626 GRANT TER
SOLD: $392,500 7/8/2005
SOLD: $333,750 9/4/2008
Upper Saddle River Comp Killer!
23 RIDGE RD
SOLD: $1,112,500 7/31/2002
SOLD: $1,270,000 5/3/2004
SOLD: $1,055,000 8/29/2008
Barbara (336)-
Overall, 35%. We’re at the edge of another big drop.
Upper Saddle River Comp Killer!
6 NORTHERN DR
SOLD: $1,425,000 7/6/2006
SOLD: $1,300,000 9/3/2008
Washington Township Comp Killer!
667 COLONIAL BLVD
SOLD: $855,000 8/19/2005
SOLD: $760,000 8/27/2008
Steve (340)-
Well said. BTW, I’m reloading on SKF too. The bailout is just going to turbocharge the ill effects to be experienced later.
All disclaimers. I also believe the Mets will win the division.
Westwood Comp Killer!
89 LEXINGTON AVE
SOLD: $405,000 6/22/2004
SOLD: $450,000 4/18/2005
SOLD: $403,000 9/2/2008
Stockette (344)-
Your house is losing value. Daily. Pick a buyer, sign the contract, and get the hell out.
Unless you enjoy rapid depreciation.
Wyckoff Comp Killer!
488 PAINE RD
SOLD: $685,000 6/23/2005
SOLD: $674,000 9/5/2008
SG Says:
For those who want to surf web without any Advertisements, I found this really cool Addon to Firefox browser.
Thanks so much. This is awesome. I don’t see Bi’s posts anymore
I can explain it in two words: Republicans suck!
How do you explain this?
http://www.dkosopedia.com/wiki/Data_on_Job_Creation_by_President
Job Loss or Gain by President and Party
* (D) Roosevelt 5.3
* (D) Johnson 3.8
* (D) Carter 3.1
* (D) Truman 2.5
* (D) Clinton 2.4
* (D) Kennedy 2.3
* (R) Nixon 2.2
* (R) Reagan 2.1
* (R) Coolidge 1.1
* (R) Ford 1.1
* (R) Eisenhower 0.9
* (R) G. Bush 0.6
* (R) G.W. Bush -0.7
* (R) Hoover -9.0
It’s gotten to the point where realtors are begging in prime train towns. This from today’s emailed listings in prestigious Glen Ridge:
“Stunning Victorian, charming details, parquet floors, stained glass windows, master suite on 3rd floor, high ceilings, deck overlooking huge backyard. A must see! PLEASE SHOW..”
Tom – good post concerning end of life issues.
Sorry you had to go through that. I hope the conclusion was peaceful.
Rich – Wow. What numbers.
Re Job Loss or Gain by President and Party
While I can’t argue that Republicans suck, remember Terry Schiavo, I think it’s misleading to put Roosevelt in there considering he essentially started after Hoover in the depths of the Depression when employment had nowhere to go but up and finished during four years of a war geared economy.
All the houses round the corner from me which went up for sale in the spring are still up for sale or withdrawn. One has gone under contract 3 times and come back constantly. One is already priced under 2005 purchase price. One has gone back to the bank. One belongs to a friend and is now listed for the number I told him to shoot for last fall. Would have sold then too.
So will it be deflation or hyperinflation?
Rapid descent into severe deflationary credit crisis.
Grim,
Hinterlands report part 2…
Hunterdon County FUTURE Comp Killers:
MLS#: 2571882
69 WESTGATE DR
Clinton Twp
SLD: 06/13/05 $414,000
OLP: 08/30/08 $385,900
DOM: 7
MLS#: 2573262
103 JUNCTION RD
Hampton Boro
SLD: 03/14/07 $686,300
OLP: 09/03/08 $624,900
DOM: 3
MLS#: 2573282
154 THATCHER RD
Kingwood Twp
SLD: 08/14/06 $550,000
OLP: 09/03/08 $519,900
DOM: 3
MLS#: 2573566
26 SAMSON DR
Raritan Twp
SLD: 11/15/05 $351,140
OLP: 09/04/08 $349,900
DOM: 2
Chifi
You’ll appreciate this- First fake tix for DM tour on sale
http://www.side-line.com/news_comments.php?id=35215_0_2_0_C
Rich In NNJ,
Are you finding a lot of new actives lately listed for just a little over previous sales price? I’m seeing many new actives listed for a few thousand over previous. One was 900 bucks over 2005 price.
It must be the psychological thing. With comissions they’re going to lose money anyway, but they just can’t seem to bring themselves to list below what they paid…
Clotpoll Says:
September 6th, 2008 at 8:55 am
Rapid descent into severe deflationary credit crisis.
clot: time for your meds….
“It’s gotten to the point where realtors are begging in prime train towns.”
At the end of 2005, I met what I think was an honest real estate agent at an open house in a desirable town in the GWB area. I wasn’t looking for myself at the time. Maybe he wasn’t always honest to everyone, I’m surprised sometimes how people I don’t know open up to me. Maybe I missed my true calling as some sort of therapist.
From Rich’s data, I see now that from 2005-2006 there were roughly 2000 fewer homes sold in bergen county. At the time I didn’t have a lot of real data, just my sense of where things where heading, and talking with him really confirmed it.
At the open house it seemed like he was looking to pick up new listings almost as hard, or possibly harder than he was trying to sell the house we were touring.
We got to talking and he told me how he wasn’t making as much money as he was before and that things were really slowing down. I could sense the undertones of desperation in his voice.
After that conversation, I tried to reaffirm my belief to the person I was going looking with, that they should hold off on buying. Apparently they didn’t hear the same thing I heard, probably because their own realtor had hyped them up so much. People like that is why the average price rose over 4%, even though units sold dropped over 18%.
I think we’re approaching a period of intense super hyper deflacession.
# Tom Says:
September 6th, 2008 at 9:28 am
I think we’re approaching a period of intense super hyper deflacession.
# Clotpoll Says:
September 6th, 2008 at 8:55 am
Rapid descent into severe deflationary credit crisis.
Think I’m going to go crawl under a rock.
My appologies for such long posts lately. I’m still trying to strike the right balance with my speechwriter :)
lostinny Says:
September 6th, 2008 at 9:02 am
Chifi
You’ll appreciate this- First fake tix for DM tour on sale
back atcha…..
http://www.youtube.com/watch?v=HuB23VyGbqw&NR=1
REM: Sprawling ranch with hardwood floors. Large kitchen with separate breakfast area. Lovely lot almost w/mature trees.
ALMOST???
lisoosh,
Don’t put too much weight on what I said. I’m not what I said, I’m not even sure what it means. I just thought I’d jump on the makeup words bandwagon :)
Plus, if I were in charge I’d be looking to crush the financial markets so hard it became cost effective to bring back manufacuring to the US and grow more of our own food. And I’d start a campaign to take the ial out of menial labor.
Thanks ChiFi,
I used to love that song.
“REM: Sprawling ranch with hardwood floors. Large kitchen with separate breakfast area. Lovely lot almost w/mature trees.
ALMOST???”
Yep, the trees were caught last week making fun of a couple of bushes.
I’m 200 posts late … but re: flat tax …
my first thought: So if we clear $350k this year, we’re going to be taxed the same way that someone who clears $10 million is?
I just don’t see how that makes sense (ditto with the current system).
I prefer a bit of a sliding scale.
Oh! Oh! Did I just say this out loud?
“Foreclosure Makes Its Move on Manhattan ”
http://www.nytimes.com/2008/09/07/realestate/07cover.html?_r=1&ref=realestate&oref=slogin
“But in recent months, mortgage lenders, real estate brokers and financial counselors have noticed that more apartment owners in Manhattan are missing payments, putting their apartments up for sale to avoid losing them to foreclosure and seeking advice about keeping up with payments.
Court filings show that some of these apartment owners have well-paying jobs as lawyers, professors and bankers. Their Facebook pages feature them at parties with friends, and their LinkedIn bios list prestigious careers and educational credentials. And they live at tony addresses like the Atelier at 635 West 42nd Street, the Ansonia at 2109 Broadway, Worldwide Plaza at 350 West 50th Street and the Philippe Starck building at 15 Broad Street.
The number of Manhattan homeowners whose names have appeared in court filings for missing three or more mortgage payments — the first step in the foreclosure process — rose by 78 percent in July from the corresponding month a year earlier, according to data tracked by the research firm PropertyShark.com. In raw numbers, foreclosure filings jumped to 93 in July 2008 from 52 in July 2007.”
The last fort starts to show cracks. We have started the budget season on wall street and from the guidance we have been given looks like bonuses aren’t going to be great to put it mildly. That is for the people who will be around after we cull the bottom 10%.
Stockette :349
Just out of curiosity…..where did your original asking price of $999,999 come from??
Are there other sales in Livingston around that price point? Is your home similar??
Is it the number you have to sell for to retire all debt?
Is it just a cool looking number? Sounds cheaper than a Million Bucks, right?
Please check back in and let us know.
BTW – Chinese New Year is January 29, 2009….tell your prospective buyers they can be “in by the holidays” The Year of the Ox is a prosperous sign.
SC –
“Re Job Loss or Gain by President and Party”
Here’s what the Kosacks left out of the story:
“The exact usefulness of these numbers is debated. They only include nonfarm payroll employment, which excludes certain types of jobs, notably the self-employed. Additionally, for at least the first eight months of a President’s term, he inherits a budget proposed and implemented by his predecessor (as well as an overall economy which may be in decline or recovery). Moreover, according to the United States Constitution, the United States Congress is responsible for government spending and thus, regardless of Presidential advocacy, bears constitutional responsibility for such things as spending and tax policy that have enormous effects upon the economy. Furthermore, it is debatable how much effect any President realistically could have on a system as large, diverse, and complex as the U.S. economy. Nevertheless, the nonfarm payrolls number is the one most frequently used in the media and by economists.”
For example: as maligned as GWB is, remember that the economy was on the downhill drag when he came in (after the tech bubble burst) so “his” job creation figures ain’t as shabby as people might think.
And further, correlation is not causation. WHAT IMPACT DOES THE EXEC OFFICE REALLY HAVE ON THE ECONOMY? Certainly very little direct impact.
…it’s all going to black.
“WHAT IMPACT DOES THE EXEC OFFICE REALLY HAVE ON THE ECONOMY? Certainly very little direct impact.”
Unless you count the deregulation of banks as having an impact, as well as the position of the administration to get agencies to increase homeownership which led to programs that contributed to the large amounts of subprime lending growth, and their move to have the currency controller step in when states were trying to put a stop to predatory lending.
But yeah, I see your point, no impact.
So let me get this straight…
Is that the reason behind behind panic buying, Suzanne who Researched This, herd/bubble mentality? How about extra-low interest rates in the beginning of the decade?
The President caused this? Sorry, didn’t know.
what are you guys talking about, GW created a massive # of jobs for illegal immigrants! also consider that the loss of all those jobs with the bubble burstign arent being counted.
Illegal labor was a huge driver for the economy for the last 6+ years, but a stealth factor that didnt show up in official stats. the huge decline now associate with the loss of those bobs is also stealth.
the point being that the economy looked better then it actually was and now looks better then it would otherwise as employment plummets.
How manny of those laborers are going to go back to mexico now that they have roots in the US, now that they have homes, wives,children that have only known the US?
Our public aid services are going to be quickly overwhelmed. This can already be seen with the closure of emergency rooms for lack of funding.
Do not take this as an attack on any one group. it is just a description of coming social problems in the US.
B squared
yes, the president and greenspan worker together to cause this. While you can argue GW may not have understood the full implications of the steps they took, greenspan and GW’s adviser certainly did.
Looks like no one in the McSame family understand economics
“Nevada regulators closed Silver State and the Federal Deposit Insurance Corp. was appointed receiver of the bank, based in Henderson, Nev. It had $2 billion in assets and $1.7 billion in deposits as of June 30.
Andrew K. McSame, a son of Republican presidential nominee John McSame, sat on the boards of Silver State Bank and of its parent, Silver State Bancorp, since February but resigned in July after five months citing “personal reasons,” corporate filings with the Securities and Exchange Commission show. Andrew McSame also was a member of the bank’s audit committee, responsible for oversight of the company’s accounting.
The younger Mcsame, who is the chief financial officer of Hensley & Co., the beer distributorship of which Cindy McSame is chairwoman, is the Arizona senator’s adopted son from his first marriage.
”
http://www.baynews9.com/content/9/2008/9/6/379819.html
400- Ket
Tru dat. My former house-cleaner had to leave for her native country coz her husband lost his job in the construction industry.
BTW, Congratulations Everybody – We are all homeowners now.
As a bonus, we get to pay all the banks via dividends on preferred shares.
The American Dream never felt this sweet.
404 vic,
sweet! who do i contact for the keys, deed, and address of my new house?
405 – Ket
Your new house is in Mclean, VA.
I think what Stockette is trying to say is that whatever the asking price, all of these prospective buyers come up with some sort of weird algorithm for a lower number as their offering price.
Offers will always be lower than asking prices, but I think she’s trying to figure out the rhyme and reason of how, if she asks for A, they come up with B.
And they’re all Chinese so there might be some sort of Chinese mindset at work here.
Is that it, stockette?
deflation in action?
New auto prices are falling at a record rate, JPMorgan analysts say
The average cost of a new vehicle in the second quarter was $25,632 — a 2.3% decline from the year-earlier period and the steepest drop recorded in the bank’s 41-year-old survey.
From the Associated Press, From the Associated Press
September 5, 2008
NEW YORK — New vehicle prices are falling at the fastest rate ever recorded, a team of analysts said Thursday, squeezing automakers’ profit margins at a time of slumping sales but also setting the stage for a sales rebound once the economy improves.
Two JPMorgan Chase & Co. analysts, auto analyst Himanshu Patel and economic analyst Marc Levinson, said in a research report that the average price of a new vehicle in the second quarter fell 2.3% from the year-earlier period to $25,632. That’s the steepest drop recorded in the bank’s 41-year-old survey, the analysts said.
scribe (407)-
She should thank God that ANYBODY wants to buy her house. Why bother trying to figure out how they came up with a number? It doesn’t matter.
Why did Dr. No decide to try and cut James Bond in half with a laser instead of a chainsaw? It doesn’t matter. Two different methods, same result.
(407)-
If there is such a thing as a “Chinese mindset”, we should all be following it. I’d be willing to bet they are the least-foreclosed ethnic group, relatively speaking.
Clot (367),
Yeah, sadly I just can’t see otherwise. I rarely have this level of conviction, but when the facts are so overwhelming on one side – and keep being confirmed by actions every day, it’s a bit hard to see any light except an oncoming train.
I remember a year or so ago, being on an conf call as the CFO reiterated with 100% confidence how the firm was fine, no risk to the balance sheet, no cap raises were going to be required etc etc. And, without knowing any hard data at all I thought “my god, this guy is either completely ignorant or out and out lying.”
I was incredulous, who could be so stupid as to say something that surely would prove false months later. Sure enough, one quarter forward, he (very pathetically) retracted every single word.
The lesson I was reminded of – ignore everything these guys say, just watch their actions, and keep your eye on the ball. The ball, in this case, being the housing market.
Everything else, the intraday vol etc, is just noise. The HFs, professional investors, tv talking heads etc. – with rare exception none of them have a clue where this going. As long as inventories are high, defaults continue to rise, banks are afraid to make loans, hoarding their capital and cutting off the oxygen- the trend will remain in place.
Despite earning 100s of millions and their CEO or senior gov titles, they didn’t get it – even when they were on the precipice. In part, I think, it’s because they were just too far removed from the reality on the ground, which many here saw years ago.
When you live in New Canaan or Greenwich in your $20mil house, limo to work, dealing with other CEOs and elite, how aware would you be of Countrywide or WaMu doing drive by appraisals, negAM loans? How much time would they spend thinking about the implications?
Most of them, by and large, really aren’t that deep – or particularly exceptional, IMO. They were too busy still buying subprime mortgage firms right to the end!
So, in hindsight, if they had no credibility on the way up, they have even less now, as they mark down their book by 5 or 10% per quarter- while their neighbor can’t sell their sh*t without self financing for 5, 10 or 20 cents on the dollar.
The reality is, an 80 or 90% markdown on hundreds of billions in on- and off-balance sheet holdings would be their admitted death knell. So, they knick a small piece each qtr, praying for housing to recover before they have to come clean. Prime loans are their last bastion of AAA excuses, and once that decimates the last rating agency valuation model – nowhere left to hide.
When the CEOs of the biggest banks in the world are basing their calculations on hope, the game is up. And a lot good, hard-working, honest people will have to pay dearly.
Just got off the phone with my cousin, who mentioned he just closed on a short sale in Sacramento – a 3 yr old condo from Countrywide, for 50% off.
My only thought was – I hope he didn’t overpay.
Steve (411)-
Was the previous owner Casey Serin?
LOL could be!
I think he’s moved on:
http://millionairebychristmas.com/
“almost w/mature trees.”
They thought about planting trees, then didn’t?
How is the weather near everyone? They installed another snow/sand fence to help with things in Sea Girt.
Clot –
It was GOLDFINGER who tried to cut Bond in half with a laser.
Always loved Oddjobs killer hat in that movie. And who could forget Pu$$y Galore?
as for Pu$$y, “I must be dreaming” was one of the all-time understatements of all time.
#410 clot: Not to sterotype, but they and the Koreans are increidibly shrewd negogiators.
trust me. this will become a dominating issue in this election:
http://blogs.denverpost.com/opinion/2008/09/06/republican-recycling/
Barny is so very pleased:
WASHINGTON (Reuters) – U.S. House Financial Services Committee Chairman Barney Frank said on Saturday that the U.S. Treasury Department plans to ensure the stability of mortgage finance giants Fannie Mae and Freddie Mac.
Frank said he spoke with Treasury Secretary Henry Paulson late Friday about proposed interventions by the U.S. government of Fannie and Freddie’s businesses.
“He informed me that the Treasury Department intends to use the powers that Congress provided it to ensure the continued and stable functioning of Fannie Mae and Freddie Mac,” Frank said in a statement.
“I am pleased by the secretary’s strong reaffirmation that the vital roles these institutions play in our nation’s housing markets must continue,” Frank said
http://www.reuters.com/article/ousiv/idUSWBT00964920080906
If they are THAT important and THAT dangerous to the economy if they fail, they should be broken up into a dozen companies so that the faliure of any one is not a cause for national alarm.
Clot,
Isn’t that true in a more general sense for all of the ethnic groups from Asia, including the Koreans and the Indians?
from craigslist:
ReMax bus tour of foreclosures:
http://cnj.craigslist.org/reb/829923661.html
scribe (421)-
I’d hate to make a blanket statement without some facts at hand. Sure seems that way, though.
Stu’s off to the airport. Anyone wanna lay odds on whether or not his Dehaviland Dash (prop) takes off from Newark this evening? : )
Simi and none? But could enjoy an evening 150 yards from the terminal for the next 9 hours. That way they at least depart on time.
Gator,
Now that he is off, I hope you aren’t going to dress up as a Sundial Queen and prance around the house tonight.
Slim and none, that is.
Come on Shore, I’m a mother now. If you’ve learned anything by watching the R convention this week, it’s that mothers are sacred. Even my crazy-libertarian consort has grown up and now works for the great state of Texas. How ironic is that? Thank you, Facebook.
Nothing on tap for me tonight except for hanging with Lil Gator and the dog and watching Lady & The Tramp (no pun intended) and the Florida-Miami game. Go Gators!
What time is he supposed to depart?
Originally scheduled for 5:45. Posted now for 6:35.
He is traveling to Cleveland, right? Right now EWR is not showing any flights to Cleveland scheduled between 5 and 8 tonight.
Cleveland is also not showing any props from Newark, although they do show, later on a 737 from Continental. If that is the airline, they may have cancelled the prop and moved folks onto a larger plane.
Columbus
http://radar.weather.gov/radar.php?rid=dix&product=N0R&overlay=11101111&loop=no
For those interested in what is here, and going to be here.
If it is flight 3218 I have something I can post for you.
Assuming that it is, this link will allow you to track where it is in close-to-realtime:
http://flightaware.com/live/flight/CJC3218
If not, this will allow you to check for the correct one and track it, altitude at various times and all:
http://flightaware.com/live/airport/KCMH/enroute?;offset=20;order=estimatedarrivaltime;sort=ASC
Thanks sure. Man this is one night I wish my dog were a cat!
438 Gator
Both the dog and I are soaked. How I wish I could have potty trained her!
Shore Guy Says:
September 6th, 2008 at 4:38 pm
Simi and none?
Oh mistake? I thought it was a pun related to CA wine reference…..
You libs will dig up just any old thing to hurt Mac and his VP. We just had one hell of a convention and Mac drew more people to his excellent speech than O. His speech was far more substantive as well and that is what has you libs quaking in your boots. I hope you libs choke on your lies.
victorian Says:
September 6th, 2008 at 12:06 pm
Looks like no one in the McSame family understand economics
“Nevada regulators closed Silver State and the Federal Deposit Insurance Corp. was appointed receiver of the bank, based in Henderson, Nev. It had $2 billion in assets and $1.7 billion in deposits as of June 30.
Andrew K. McSame, a son of Republican presidential nominee John McSame, sat on the boards of Silver State Bank and of its parent, Silver State Bancorp, since February but resigned in July after five months citing “personal reasons,” corporate filings with the Securities and Exchange Commission show. Andrew McSame also was a member of the bank’s audit committee, responsible for oversight of the company’s accounting.
The younger Mcsame, who is the chief financial officer of Hensley & Co., the beer distributorship of which Cindy McSame is chairwoman, is the Arizona senator’s adopted son from his first marriage.
”
http://www.baynews9.com/content/9/2008/9/6/379819.html
Buy while you can…
“The moment, however, is likely to last only about another six months, said Jeffrey Otteau, a market analyst whose Otteau Appraisal Group monitors statewide sales data and provides monthly reports to the real estate industry.
He predicted that by next spring the subprime lending crisis, which primarily affects the lower-priced end of the market, will come to an end with the automatic resetting of interest rates on the final round of subprime loans made two years before. Wary lenders will then begin to loosen purse strings again to higher-leverage buyers.”
http://www.nytimes.com/2008/09/07/realestate/07njzo.html?ref=realestate
441….i think i saw u there….where you the medicated looking white guy/girl…?
stories from the front:
got together with family and friends this afternoon. heard quite a mix of stories.
1. couple in N. Cali have had house on market since jan. he lost his job in finance in dec and found a new one in wisconsin (i dont know what this guy does in finance). he has to be onsite by dec1. the have dropped the asking price on the house 4 times and 0 offers. they are now putting the house up for 20% below the last house that sold in their niegborhood as a last ditch measure.
2. couple from missouri, outside st louis, have seen their neighborhood go from full to more empty foreclosures then occupied homes. are having problems with squatters and have people raiding the mpty homes for copper and what not.
3. couple from jersey city just put their house on the market (apartment) after he got mugged twice in 2 months walking home from train station. convinced they will sell quickly and buy in princeton.
“Flights in and out of Kennedy, LaGuardia and Newark Liberty airports are delayed by 45 minutes to five hours as the storm bears down on the region.”
http://www.nydailynews.com/ny_local/2008/09/06/2008-09-06_tropical_storm_hanna_is_a_washout_on_eas.html
I wanted to check out a 2006 BMW at the dealer as my friend can get me one, I had to wait to see a rep and they also sell minis and that sections was selling them full price.
Stockette,
My wife is Chinese, so maybe I can translate the thought process going on here. Chinese people like to earn and save money, and avoid borrowing money. So while most Americans were borrowing with fizzy mortgages to buy overpriced homes and add granite countertops, accumulating large credit card balances to go on dumb vacations, and leasing SUVs, a number of Chinese were actually building net worth and stores of liquidity. Now, some are preparing to deploy that savings by carefully bargain hunting in the real estate market. They know that Americans generally list well above fair value for their homes because of some irrational sentimental attachment, so they will only place bids at levels well below your offer. In China, people bargain for stuff like clothes or knicknacks all the time, just for the fun of it, so they sure as heck are going to bargain for an extra $50k if they think they have the upper hand in the negotiation, which they certainly do.
One Chinese couple we know have rented for the past 5 years because they were absolutely unwilling to lose money financing an overpriced house. They are looking to buy in the next year assuming real estate continues to fall. If the do go out house shopping now, they’ll make offers pre-discounting lower 2009 prices.
Hope this helps!
re #441
you want to talk about lies… your veep candicate keeps going around saying how she said “thanks but no thanks” to congress when this is what she said as governor when she announced the cancellation of the bridge to nowhere…
PALIN (9/21/07): Ketchikan desires a better way to reach the airport, but the $398 million bridge is not the answer. Despite the work of our congressional delegation, we are about $329 million short of full funding for the bridge project, and it’s clear that Congress has little interest in spending any more money on a bridge between Ketchikan and Gravina Island. Much of the public’s attitude toward Alaska bridges is based on inaccurate portrayals of the projects here. But we need to focus on what we can do, rather than fight over what has happened.
Yep, she really told Congress alright
re: Fannie/Freddie
http://www.marketwatch.com/news/story/rep-barney-frank-confirms-treasury/story.aspx?guid=%7B46D1439E%2DA2C4%2D418C%2D9BE0%2D09BE0B9EE60D%7D&siteid=bnbh#comments
On the earlier tax debate:
In theory, a federal sales tax combined with the abolition of the income tax (personal and corporate) would provide the ideal economic incentives. It would incentivize savings and investment, and disencentivize consumption, thus setting the stage for future economic growth. Keep in mind though that to keep taxation levels bearable, government spending needs to be reigned in. Cutting government spending is directly connected to cutting future taxation. Long term, spending and taxation have to be connected.
But I doubt we’ll see any structural improvements in taxation or spending during a period of economic distress. I expect to instead see more and more populist band-aids desperately slapped onto the US economy’s deepening wounds, as politicians become increasingly reactive and focused on the temporary, rather than addressing long term structural issues. In other words, Americans will continue to attempt to borrow from the future to live beyond their means. And I suspect folks will attempt to soak “the rich” (i.e. those who have been the most productive, have saved more than they’ve spent) to serve as a scapegoat, to slake their envy.
It looks to me that the US economy is going to have long, drawn out misery. Anyone who hasn’t read the novel Atlas Shrugged should read it to prepare for the future.
A West 405
“I expect to instead see more and more populist band-aids desperately slapped onto the US economy’s deepening wounds, as politicians become increasingly reactive and focused on the temporary, rather than addressing long term structural issues.”
I couldn’t agree more. My fear is these dumb self seeking bastards might just sink us this time around.There is to much bad stuff for them to cover & get away with.
Bad Bad times ahead.
clott,
got your cart ready?
http://3.bp.blogspot.com/_9ZzZquaXrR8/SMK-PxQPs6I/AAAAAAAABn8/-kejywd6K6Q/s1600-h/AllEarnings.jpg
Dam out of Scotch & ain’t going out to get it in this. So much for my planing ahead.
Beer yuck. Sorry you beer guys just not my thing.But if it’s all you have!
Ket are those pretzels I see on the cart ,
they go good with beer.
Stu’s sitting on the runway with about 40 planes ahead of him. Gonna be a long night.
There were 2 passengers on the plane that flew into Newark on the first leg of the flight from Portland, ME. They were crying and they absolutely refused to continue on. It’s going to be a bumpy ride to Ohio.
Gator to they serve drinks on that flight?
Hope so.
who is the fannie and freddie bailout helping? the chinese? consider, The Chinese central bank holds about $340 billion of the paper. But Pimco, the US’ largest bond investor, has $500 billion worth.
wonder why bill gross is yelling for a bailout?
also:
FASB-140 the accounting standard will be implemented around January 2009. They will require Fannie and Freddie to take an additional $3.7 trillion of debt on their balance sheets. they would need to raise new capital, about $80-100 billion.
its a miracle when they can raise 3 billion. how are they going to raise 80+ billion?
but wait there’s more. the preferred share holder have to be bailed out. a large # of us banks hold fannie and freddie preferred shares and is those shares are not bailed out you would sink a huge number of US banks virtually overnight and wipe out the FDIC at the same time.
The FDIC is going to have to be bailed out by the treasury as is. it is likely one of the big banks such as wachoniva or wamu could go down in the next few months. one of these banks alone could wipe out the FDIC reserves.
just for fun:
Richard Syron, Freddie’s CEO, stands to get another $38 million as a severance package.
Fannie Mae Investor Sues Citigroup, Merrill Over Stock Drop
http://www.bloomberg.com/apps/news?pid=20601103&sid=awGWI3NJX3Rs&refer=us
Citigroup Inc., Merrill Lynch & Co. and three other banks were accused in a shareholder lawsuit of failing to warn investors about proposed accounting-rule changes that lowered the value of preferred Fannie Mae stock….
FASB is considering changes to Financial Accounting Standard 140 that may require Fannie Mae and Freddie Mac to bring a combined $3.7 trillion in off balance sheet assets on to their books, which would substantially raise their capital requirements…..
“Should FAS 140 be changed as described above, Fannie Mae could be required to raise up to $46 billion of capital, an amount that would have a substantial impact upon the company,” Orkin said in the lawsuit.
mike 454
peanuts. photo description
Lewis Wickes Hine All earnings go to father May 21, 1910
Joseph Severio, Peanut Vendor. Wilmington, Delaware. 11 years old. Pushing cart 2 years.
Out after midnight. Ordinarily works 6 hours per day.
Works of own volition. Doesn’t smoke. All earnings go to father.
cart phtot from here
http://www.shorpy.com/
http://www.shorpy.com/files/images/3f05660u.jpg
http://www.shorpy.com/files/images/03118u.jpg
meat getting expensive?
Ket look on left hand side of cart on the stick or whatever it is pretzels?
why deflation?
if we agree with shiller that we have seen a 16% loss in home prices (composite 20 index) with a pre loss value of 23 trillion , then there has been a loss of approx 3.7 trillion. The FED has injected only 500 billion so far as temporary loans ( we’ll see how temporary).
Just to break even the GOV would have to inject about 3 trillion. that doesnt count the continued losses or the various financial institution write downs, another 500+ billion!
It seems to me, in my novice opinion that if the government tries to print 3+ trillion dollars in short order the international bond market will hit the wall and the no one will touch the US dollar. i.e collapse of the dollar.
SO instead the government holds the debt and passes it to the tax payer. But this is doomed to failure as well. both private and commercial tax receipts are falling as the tax burden increases. you will hit a point where basic debt maintenance precludes the funding of basic social programs.
Consider that there is a point at which the debt servicing surpasses income and the costs of basic services combined. there is no government i history that has survived crossing this threshold which we rapidly approach
Kettle
I got page not found on those links.
lost ,
they work for me?.?.?
to all,
and dont worry, if my manic rantings are even close to accurate then the US will not be alone in the poop
Westy (450)-
Might I suggest Love in the Ruins, by Walker Percy?
Unlike Rand, Percy could actually write well.
Ket 464 a much more in-depth analysis of what I posted in 451.
“My fear is these dumb self seeking bastards might just sink us this time around.There is to much bad stuff for them to cover & get away with.
Bad Bad times ahead.”
Still comes up snake eyes for the USA.
vodka (452)-
I got that beat. All I need is a tin cup to sell pencils.
Vodka (457)-
Syron deserves a bullet between the eyes.
Ket 466 We aren’t going down alone for sure. The worlds monetary systems are much to interdependent for that.
Vodka (464)-
The best solution might be the Russian one: repudiate the debt, stiff everybody, and roll the meter back to 0.
Clot By the way let the owner off the hook told him to just go & try selling it. Have another rental in my sights a lot nicer built in pool, newer, natural gas no oil. Maybe a deuce more, no biggie.Still have the lease till Jul if I want to push it.If they don’t want to rent at my price there are more.I’ll take a few months & get another deal.
Clot 472 I think that’s the way out of this mess.
mike (471)-
We’ve exported our poison all over the world. Maybe VPILF can tout that in her stump speech.
Clot 475 Yea just let the Chicoms stop buying are debt.We go they go.
They stop we default end game.
Don’t think anyone in DC has the stones to play hard ball.
Hi Grim,
Could you please give me the Address DOM, and prior listings for GSMLS Number: 2491907 .
Kettle
Maybe the mac doesn’t like them. I dont know.
From the WSJ
Treasury to Outline Fan-Fred Plan
By DEBORAH SOLOMON, JAMES R. HAGERTY and DAMIAN PALETTA
September 6, 2008 7:00 p.m.
The U.S. Treasury is expected to announce early Sunday afternoon details of a plan under which regulators will effectively take temporary control over government-sponsored mortgage investors Fannie Mae and Freddie Mac.
The Treasury won’t necessarily make a large injection of capital immediately into the ailing companies, which provide the bulk of funding for U.S. home mortgages. But people familiar with the plan said the Treasury will stand ready to provide capital as needed, depending how quickly losses deplete the companies’ meager capital holdings.
Not to bash you, because you’re new, but nothing here is ‘interesting.’ housing are losing VALUE on a monthly basis. maybe 5k a month. you should take whatever offer you get now because in a few months, it’s going to be 25k or 30k less than what they’re offering now.
where you have been, btw? this has been happening for two years. i dont know your situation, but you should take what you can get now.
the ‘selling’ season is the summer, and that’s over. be smart. sell now.
Has to rank as one of the greatest comments in the history of this site. Bravo, sir.
Hey Gator. Nice job in the Swamp tonight.
So when is it time to buy in Maplewood? I’m serious. Wife liked it; me, too. Still a little out of range, however, on low to mid six figures with two kids and an inability to save as we should. Not in debt, but not saving.
Advice welcomed.
It is very frightening to to think that if John Mc Cain is elected we can have someone with the educational background noted on the Bloomberg article linked below one heart beat away from being president of our country,
http://www.bloomberg.com/apps/news?pid=20601070&sid=afMxJItgFms8&refer=hom
What scares me even more is that we continue to let individuals like our treasury Secretary Paulsen control our financial markets and make decisions that will influence our lives for decades to come.
The folks that are in charge now are clearly clueless. The political parties have nominated people who seem ill prepared to help our country handle what is clearly a complicated and possible government bankrupting economic crisis.
The FNMA and Freddie Mac takeover indicates to that our entire financial market structure has failed, in all probability every major bank and financial institution in our country is insolvent if we would require them to report under GAAP accounting principals.
DO the people we are voting for have the skills to lead us out of this economic nightmare?
It is very frightening to to think that if John Mc Cain is elected we can have someone with the educational background noted on the Bloomberg article linked below one heart beat away from being president of our country,
http://www.bloomberg.com/apps/news?pid=20601070&sid=afMxJItgFms8&refer=hom
What scares me even more is that we continue to let individuals like our treasury Secretary Paulsen control our financial markets and make decisions that will influence our lives for decades to come.
The folks that are in charge now are clearly clueless. The political parties have nominated people who seem ill prepared to help our country handle what is clearly a complicated and possible government bankrupting economic crisis.
The FNMA and Freddie Mac takeover indicates to that our entire financial market structure has failed, in all probability every major bank and financial institution in our country is insolvent if we would require them to report under GAAP accounting principals.
DO the people we are voting for have the skills to lead us out of this economic nightmare?
#349 Stockette Says:
It’s nothing unusual. This is typically how a real-estate bubble unwinds. Sellers are generally a couple of months/weeks behind the current market prices. Every time you have lowered the price it’s a little too late since the market is a coupe of months/weeks ahead of you.
In an appreciating market it may make sense to hold out, but given the outlook for the next couple of years, it probably not the smartest thing to do.
Supply side response pick up in top school town in NJ
Montgomery mayor challenges affordable housing report
Under the new COAH rules, Montgomery faces an obligation of around 500 additional affordable housing units, a figure that Mayor Birge believes would require an additional 2,500 units in order to be economically feasible for development.
Despite the pending conclusion of the lawsuits, Montgomery Township staff is working towards developing a plan to fulfill the new obligations.
Township officials said Montgomery would face potential lawsuits from developers seeking “builder’s remedy” suits, if the township does not file a housing plan with the state government by the end of 2008.
From “Fannie and Freddie blind to the bubble” Associated Press – Alan Zibel
“Treasury Secretary Henry Paulson has been in contact in recent weeks with foreign governments that hold billions of dollars of Fannie and Freddie debt to reassure them that the United States recognizes the importance of the two companies.”
“Nevertheless, the Bank of China said in late August that it cut back its portfolio of the Fannie and Freddie debt by about one quarter since the end of June.”
“Washington-based Fannie and McLean, VA-based Freddie are the engines behind a complex process of buying, bundling and selling mortgages that remains a mystery to millions of Americans whose home loans pass through this system. Together Fannie and Freddie hold or guarantee about $5 trillion in mortgage debt – about half of the nation’s total.”
“They traditionally backed the safest loans, 30-year fixed rate mortgages that required a down payment of at least 20 per cent. But in recent years, they lowered their standards dramatically, matching a decline fueled by Wall Street banks that backed the now-defunct subprime lending industry.”
“Armando Falcon who clashed frequently with the companies during his six years as Fannie and Freddie’s chief government regulator, said in an interview last month, that the companies’ woes are similar to the downfall of the major corporate titans like Enron and Worldcom earlier this decade. “It boils down to a whole lot of greed and arrogance,” he said.”
“The companies, he said, took advantage of the perception on Wall Street that the government would stand behind them in a time of crisis, as is the case now.”
“With that implied government backing, the companies generated large profits for years, but ultimately took on too much risk, causing investors to lose faith in their ability to navigate the historic housing bust.”
“While Fannie and Freddie generally had higher standards for lenders than the subprime mortgage companies that started going belly-up at the end of 2006, the duo lowered their standards during the housing boom and bought securities linked to riskier loans.”
“Even as the subprime mortgage market collapsed, Fannie and Freddie kept backing risky socalled Alt-A-loans, which were made to borrowers with solid credit but little proof of their income, or small or no down payments.”
“They lowered their standards dramatically…”
“…but ultimately took on too much risk…”
“..the duo lowered their standards…”
“It boils down to a whole lot of greed and arrogance….”
Whoever was in charge of lowering those standards and risking stockholder’s money needs to go to jail.
Happy birthday to you..
Happy birthday to you…
Happy birthday dear Griiiiimm.
Happy birthday to you.
(Just imagine I was singing..)
I think it is great that fannie and freddie went kaput on Grims bday
grimmie mae
http://tbn0.google.com/images?q=tbn:Xv-jRdoSuTefnM:http://content2.myyearbook.com/zenhex/images/quiz68/337381/337381_res1_beer.jpg
HAPPY BDAY GRIM
Hey Frank, here’s your doom and gloom in Bergen County at least.
The Bergen County real estate market is down over 20% when you look at the forest and not the trees.
#453 Mikeinwaiting
No offense taken, to each his own. However, if you were stuck with some mass produced swill like BudMillerCoors or something called “light” or even worse “lite”, then I truly feel for you.
There are a variety of excellent styles that are easily available these days. If you like scotch, may I recommend a nice Belgian abbey ale, such as Chimay? Perhaps something heartier, such as an Imperial Stout? Victory’s Storm King would have been appropriate for last night’s weather… :)
Mikeinwaiting Says:
September 6th, 2008 at 7:55 pm
Dam out of Scotch & ain’t going out to get it in this. So much for my planing ahead.
Beer yuck. Sorry you beer guys just not my thing.But if it’s all you have!
Happy Birthday JB
Happy Birthday Grim!
No candles on your cake this year though. Not a good time to mix fire and real estate in NJ.
Here is the deal with the Asian buyer ( and the buyer on this board ) The know how much it is worth, how much it was worth, how much you paid for it. They know the comps, financing, probably have those listings of DOM and times under contract ect. This should start to sound familiar to discussions on this board about low balling.
Happy birthday Grim!
grim…
Happy Birthday!!!!!
I hope you have a Great day…
HP
Happy Birthday!, Jim
This is the 3rd time I have had the oppurtunity to wish you a Happy Birthday, time flies when you know/don’t know someone (-:
KL
Happy Birthday Grimmy! Hope you make it a memorable one.
483 Shore – Thanks. The Urban Meyer era is much better than the Ron Zook era. Those were dark days when I wasn’t able to watch Gator football.
Stu got into Ohio 2 hours late last night. He said the first 10 minutes of the flight were ‘harrowing’ but the rest were smooth sailing.
Happy, happy birthday Grim. I hope you have a wonderful day.
Gator
Glad to hear Stu got there ok. BTW, I take it you are rejecting my application? Also, I emailed you the day I got your note. Did you get that? I’ve lost all my emails when I switched computers.
Hey, why dont we suspend elections for the President and just hold elections for the Treasury Secretarys of both parties – Looks like they are controlling the government for all practical purposes.
vIC,
why hold elections? the next treasury sec will be a highly connected Goldman lackie. just check the list to see who is next in line. perhaps ask the GS board of directors who the next treasury sec is.
Happy Birthday, JB, with many more to follow.
Nothing against Asians but I hate stereotypes, except for the ones about grils that wear glasses ;) So let me play devil’s advocate with all due respect.
There were a lot of Asian’s that were buying homes during the bubble at a time when a lowball offer was considered only 5% over asking. Asian names show up in foreclosure listings all the time. They made just as many boneheaded decisions as other ethiciities.
Here’s one house in Bergen County that was under foreclosure twice. The first time, the owner was Asian but he was able to sell the home for 133% of what he paid for it. More than $300k over what he owed on the home after being able to refinance it to avoid foreclosure. The person he sold it to was Asian as well. Paid way over what the house should have been worth, even during the bubble. The difference in price was large enough that even after foreclosure and factoring the down payment, both owners could have walked away with a good deal of paper in their pockets IF they were colluding. Not saying they were, but the deal looks supsicious to me.
Let’s not forget the palisades park asian owned mortgage company that defrauded banks and the asian homeowners that also pleaded guilty in the same scheme. The original statements from the owners was that they didn’t know any better and were duped. That doesn’t fly with this mystical real estate power.
And something on the more sleazy side. I remember a few years ago working late and getting an IM from some woman with a bikini photo on her profile. The IM had a phone number and told me to call if I wanted a massage. This was like 2-3 o’clock in the morning. I googled the number and it turned out to be a “Spa” in Bergen County. I called it out of curiousity, no I didn’t make an appt, and an Asian sounding woman answered the phone. I’ve driven past this place, big sign that said something spa and it looked legitimate. Later I found out it was shut down and there was a notice on the door saying something about the owner charged with such and such.
Now I’m not trying to bash anyone here, or trying to say all Asians are bubble house buying, mortgage scamming, happy endingers, I just wanted to burst the stereotypes because a) they’re not necessarily true b) even seemingly positive stereotypes are not good.
Of the Asian immigrants coming here and making these wise real estate decisions, how many used to be produce pickers on farms back home? More likely I think they were people that had experience with business and finance and could make more sound financial decisions.
My appologies if I offended anyone by picking out negative examples. It wasn’t my intent to offend just to show that we’re all mostly the same as a whole and the more we realize that the better our relations will be.
Ket –
I think Roubini was right on the money – The decline of an empire starts when you turn from a creditor nation to a debtor nation. We would not have had to guarantee FRE/FNM bonds at cost to the taxpayer if we didnt have to borrow $ 500 Billion a month from the Chinese just to cover our budget deficit.
So, the diff between both parties is tax-and-spend vs borrow-and-spend. At least we are not indebted to anyone if we explicitly tax our own.
504 – Not rejecting your application Lost. Just thought from Nom’s comments that he wanted to take a more active role in staffing the administration.
Been pretty busy here with work drama. Will write again soon.
Happy, Happy Birthday Grim!
Also, in regards to why people are offering less than asking price…
People generally keep and pay for houses for a long time, it’s not like the gas you put in your car that will be gone in a matter of days.
People don’t offer what they think the house is worth today, they offer what they think the house will be worth in the near future. When real estate looked like it would continue to grow, people were willing to offer more. Now that real estate looks like it will continue to decline, people don’t want to offer more than the house will be worth in a year or so.
As a seller though, you want to get at least today’s price. That’s the disconnect.
vic, clott
the idea of repudiating all debt and starting over is probably one of the best options the US has. The catch is that like russia, it would mean the end of our empire while keeping the country intact. no politician and most citizens are not prepared to even consider the end of the american empire. Any real solution to our financial mess will nessacitate the end of the american empire and that is reason #1 we will not see a real solution. As i said before no politician is willing to accept the end of the american empire
By the way, in this liberal, elitist government you guys are cooking up, are you going to have a Secretary of the Inferior? :)
Way – Way off topic –
FresnoBee.com by Bill McEwen
Budget-torn state, county could learn from Clovis” – some highlights -This article really explains the little town of Clovis, CA where I live.
“For decades, the city founded by wheat king Clovis Cole and grown by education wizard Doc Buchanan has shown other places how to get things done.”
“Now with California’s top officials locked in a destructive dispute over state finances and agencies throughout the state trying to balance their books, Clovis-93,000 people strong-again is offering a template for success.”
Really, Gov. Schwarzeneger and other Capitol leaders should get on a bus and come down to the City Council meeting Monday night. There they’ll see how Clovis citizens are handling their budget troubles.”
“To a lot of folks, the “C” in Clovis stands for conservative values. The city leans to the right, no doubt. But, more than anything, the “C” represents a commitment to making things work.”
“In fact, the city is something of an experiment in competence, accountability, and pride – if you call a place incorporated in 1912 an experiment.”
“When projections showed that Clovis faced a $4.3 million budget deficit in May, city leaders attacked the shortfall by saying we’re all in this together.”
“They didn’t attempt to pit departments against each other….they didn’t make the deficit appear bigger or smaller than it was for political benefit.
“Clovis prefers that its high school football team make the headlines. City Hall’s goal is to quietly continue the Clovis way of life.”
“And so City Manager Kathy Millison and the City Council put together a plan-cut programs and services by $2.9 million and ask all 460 employees to surrender a collective $1.4 million in salaries and benefits.”
“One of the keys was presenting employees with options and ordering an independent review of city finances, which confirmed the shortfall.”
“Managers, city council members and police officers agreed to pay or benefit cuts. Givebacks approved by firefighter union leadership will go to the council for approval Monday. Employees represented by two other unions are being asked to sacrifice a total of $404,000.”
“Making the shared sacrifice even more remarkable is the fact that the city’s bargaining units hadn’t received raises
before the economic turndown.”
“Council members, for example agreed to a 5% increase in what they pay for health benefits. Managers gave back retirement money. Other employees agreed to put off cashing out comp time.”
“Clovis soon will test the waters to see if residents want a safety tax for police and fire services or support creating citywide lighting and landscape maintenance districts.”
“Conservatives generally don’t like taxes, but Clovis residents aren’t hesitant about investing in themselves. When you put the greater good ahead of individual wants, you’ve got a better chance of riding out storms drowning everybody else.”
“Are you paying attention, Sacramento? Are you taking notes, Sheriff Mims, county supervisors and labor leaders?”
“Don’t feel threatened by our friends in Clovis.”
“Be inspired.”
I’m so proud of my little city and my school district. By agreeing to cut backs and foregoing raises, no city or school district jobs have been lost.
I think it is great that fannie and freddie went kaput on Grims bday
Right? Go figure.
Thanks everyone! Spent the morning at the office working on audit documentation.
Blah.
grim,
It’s only 10:11 in the morning!!!!
Happy Birthday!
How is this upcoming bailout going to affect the dollar? Will be interesting when markets open:
Alternative 1: Make it stronger? Because confidence in the US markets are restored, foreigners hurry to buy US assets, sell foreign currency?
Alternative 2: Make it weaker as the US is putting yet another burden to the tax-payer.
Happy B-day Grim!
A humorous read from Zillow…
The Majority of U.S. Homeowners Thinks Their Home is Insulated From the Housing Crisis
A recent study conducted by Zillow finds what they call a “Not My House! Sentiment,” where despite the evidence that 77% of U.S. homes actually declined in value in the past year, 62% of homeowners believe their own home’s value has increased or stayed the same.
Agree with Tom on his assessment of the Asian population. I think every segment of population has it’s share of smart folks and suckers.
Observations on Asians and being frugal:
Many are suckers for these luxury brand name handbags. That used to mostly to apply to Japanese, but nowadays you can hear lot’s of Chinese being spoken if you happen to check out your LV-store next door. Maybe that has to do with this showing ‘face’ thing?
Same for buying at inflated bubble prices in ‘blue-ribbon’ school districts, and anything educational (kumon, the violin lessons, etc. )
#442 frank: Yeah, sure, it will all be over by Spriong 2009, and prices will start to rise. It was all supposed to be over this year, and last year.
Mr. Otteau i assume forgot abou the last down turn, where prices fell and than stayed flat for 10 years.
Yeah, I better run out with my checkbook now. What complete nonsense.
When the NJ numbers reported by NAR were found to be off as reported here, Otteau later said something to the effect of, we thought something wasn’t right but didn’t look into it.
Why does anyone report what his group says anymore?
#485 mtg: Who care ho w,amy colleges she wnet too, that by itslef is no issue for me.
Just look at the mess all the Harvard MBA’s have created. Stupid is stupid, no matter how many colleges you wnet to or which one.
#493 Tom: But Mr. Otteau syas all will be well by Spring 09, that is next Spring as in 6 months. (sarcasm off)
WSJ
Treasury to Outline Fan-Fred Plan
By DAMIAN PALETTA
September 7, 2008 10:35 a.m.
WASHINGTON – U.S. Treasury Secretary Henry Paulson and Federal Housing Finance Agency Director James Lockhart are expected to release details of the planned conservatorship of Fannie Mae and Freddie Mac at an 11 a.m. press conference in downtown Washington.
Mr. Lockhart’s agency was created several weeks ago by Congress and is responsible for overseeing Fannie Mae and Freddie Mac, which own or guarantee more than $5 trillion of U.S. mortgages. The companies have reported massive losses in recent months, in part because of their huge exposure to slumping housing market. They have faced repeated questions about the adequacy of their accounting and their stock prices have tumbled precipitously.
Federal law allows the FHFA to take either or both company into conservatorship if certain criteria are met. The recently enacted housing rescue law also gives Mr. Paulson a separate power to inject capital into either firm, which is expected to be a separate part of the announcement Sunday morning.
The conservatorship is expected to include the departure of Fannie Mae chief executive officer Daniel Mudd and Freddie Mac chairman and chief executive officer Richard Syron, who took over at each company several years ago after separate accounting scandals. Messrs. Mudd and Syron were only informed of the government’s plan late Friday, and the boards of both companies met Saturday.
It is unclear how long a conservatorship might last or how much it might cost the U.S. government, though it will almost certainly extend into next year. Mr. Paulson has already briefed some lawmakers and both presidential candidates on the plan.
“The interim effect is going to be to strengthen the public mission of what they do,” said House Financial Services Committee Chairman Barney Frank (D., Mass.)
The longer-run future of the companies will be up to Congress, which created both of them to support the housing market, as well as the next administration.
Treasury Secretary Henry Paulson briefed Sen. Barack Obama, the Democratic presidential nominee, on Friday and spoke on Saturday with Sen. John McCain, the Republican nominee.
In a statement Saturday, Sen. Obama called the situation “extremely serious” and said it affects “our entire economy.” He added: “Any action we take must be focused not on the whims of lobbyists and special interests worried about their bonuses and hourly fees, but on whether it will strengthen our economy and help struggling homeowners.”
Sen. Obama said the rescue also “must protect taxpayers, not bail out the shareholders and management of Fannie Mae and Freddie Mac.”
Alaska Governor Sarah Palin, the Republican nominee for vice president, said during a rally Saturday afternoon in Colorado Springs, Colo., that Fannie and Freddie have “gotten too big and too expensive to the taxpayers.” She added: “A McCain-Palin administration will make them smaller and smarter and more effective for homeowners who need help.”
The plan will also likely face immediate scrutiny from Congress as it returns from a lengthy recess next week.
Speaker of the House Nancy Pelosi (D., Calif.) said she would work “in a bipartisan manner” with Mr. Paulson, other Bush administration officials and congressional leaders to review the plan “to ensure that the interests of taxpayers and the broader economy are protected.”
WSJ
Treasury to Outline Fan-Fred Plan
By DAMIAN PALETTA
September 7, 2008 10:35 a.m.
WASHINGTON – U.S. Treasury Secretary Henry Paulson and Federal Housing Finance Agency Director James Lockhart are expected to release details of the planned conservatorship of Fannie Mae and Freddie Mac at an 11 a.m. press conference in downtown Washington.
Mr. Lockhart’s agency was created several weeks ago by Congress and is responsible for overseeing Fannie Mae and Freddie Mac, which own or guarantee more than $5 trillion of U.S. mortgages. The companies have reported massive losses in recent months, in part because of their huge exposure to slumping housing market. They have faced repeated questions about the adequacy of their accounting and their stock prices have tumbled precipitously.
Federal law allows the FHFA to take either or both company into conservatorship if certain criteria are met. The recently enacted housing rescue law also gives Mr. Paulson a separate power to inject capital into either firm, which is expected to be a separate part of the announcement Sunday morning.
The conservatorship is expected to include the departure of Fannie Mae chief executive officer Daniel Mudd and Freddie Mac chairman and chief executive officer Richard Syron, who took over at each company several years ago after separate accounting scandals. Messrs. Mudd and Syron were only informed of the government’s plan late Friday, and the boards of both companies met Saturday.
It is unclear how long a conservatorship might last or how much it might cost the U.S. government, though it will almost certainly extend into next year. Mr. Paulson has already briefed some lawmakers and both presidential candidates on the plan.
“The interim effect is going to be to strengthen the public mission of what they do,” said House Financial Services Committee Chairman Barney Frank (D., Mass.)
The longer-run future of the companies will be up to Congress, which created both of them to support the housing market, as well as the next administration.
Treasury Secretary Henry Paulson briefed Sen. O, the Democratic presidential nominee, on Friday and spoke on Saturday with Sen. John McC, the Republican nominee.
In a statement Saturday, Sen. O called the situation “extremely serious” and said it affects “our entire economy.” He added: “Any action we take must be focused not on the whims of lobbyists and special interests worried about their bonuses and hourly fees, but on whether it will strengthen our economy and help struggling homeowners.”
Sen. O said the rescue also “must protect taxpayers, not bail out the shareholders and management of Fannie Mae and Freddie Mac.”
Alaska Governor Sarah P, the Republican nominee for vice president, said during a rally Saturday afternoon in Colorado Springs, Colo., that Fannie and Freddie have “gotten too big and too expensive to the taxpayers.” She added: “A McC-P administration will make them smaller and smarter and more effective for homeowners who need help.”
The plan will also likely face immediate scrutiny from Congress as it returns from a lengthy recess next week.
Speaker of the House Nancy Pelosi (D., Calif.) said she would work “in a bipartisan manner” with Mr. Paulson, other Bush administration officials and congressional leaders to review the plan “to ensure that the interests of taxpayers and the broader economy are protected.”
Happy Birthday grim!!! All the best.
Clot: Now that FRED-FAN have been nationalized, any thoughts on what happens to house prices in our area now.
I believe it will accelerate the decline;your thoughts as always are appreciated.
Fannie/Freddie bailout has to mean tighter lending going forward. This should only accelerate price declines
dblko,
the only people whp will rush to buy dollars are those who are misinformed or has an alternative stake in the matter. keep in mind i nothing about economics or investing, but an average investor who were to jump into dollars now is a fool who deserves to be parted from his money.
increasing the debt burden on your population when an economic crisis is looming is foolhardy at best.
The only thing the government should be doing is decreasing spending and increasing debt payments as quickly as possible
is it a good time to buy fnm and fre tomorrow?how much do you think they will open?
Bloomberg radio is broadcasting a discussion on the bailout:
http://www.bloomberg.com/tvradio/radio/#
I had an interesting time relating to my blog this week. I was contacted by a local foreclosure assistance company in relation to my use of the word “defraud” in a news item I blogged about.
They’re being sued by the MN AG’s office. I told them I’d look into it to correct any error if they are being unjustly lumped in with another company.
Spoke with the AG’s office and got a copy of the complaint. The allegations against them make it very clear that they are indeed being sued for fraud.
You can read more about it here if you are interested.
Happy Birthday!!!
Happy Birfday Grim……
Chi, the update posted minutes ago:
From the WSJ:
U.S. Outlines Fan-Fred Takeover
By MICHAEL R. CRITTENDEN
September 7, 2008 1:24 p.m.
WASHINGTON — U.S. federal regulators outlined their takeover of Fannie Mae and Freddie Mac Sunday morning, including control of the firms by their regulator and a Treasury Department purchase of the firms’ senior preferred stock.
The plan, outlined jointly by the Treasury Department and Federal Housing Finance Agency, also includes a plan for the Treasury to purchase mortgage-backed securities from the firms in the open market, and a lending facility through the Treasury from its general fund held at the Federal Reserve Bank of New York.
Rep. Barney Frank and Treasury Secretary Henry Paulson speak after a hearing of the House Financial Services Committee on July 10, 2008.
Treasury Secretary Henry Paulson said the two firms are “critical to turning the corner on housing” and that the plan should promote stability in the secondary mortgage market and lower the cost of funding.
“Through the four actions we have taken today, FHFA and Treasury have acted on the responsibilities we have to protect the stability of the financial markets, including the mortgage market, and to protect the taxpayer to the maximum extent possible,” Mr. Paulson said.
Mr. Paulson acknowledged that the radical proposal does pose risks for U.S. taxpayers, giving the U.S. government a “large stake in the future value of these entities.”
“In the end, the ultimate cost to the taxpayer will depend on the business results of the GSEs going forward,” Mr. Paulson said. “To that end, the steps we have taken … will together improve the housing market, the U.S. economy, and the GSEs’ business outlook.”
Federal Reserve Chairman Ben Bernanke, who was included in frantic discussions held by policymakers over recent days to finalize terms of the arrangement, lauded the moves.
“These necessary steps will help to strengthen the U.S. housing market and promote stability in our financial markets,” Mr. Bernanke said in a statement. “I also welcome the introduction of the Treasury’s new purchase facility for mortgage-backed securities, which will provide critical support for mortgage markets in this period of unusual credit-market uncertainty.”
The FHFA, which regulates the two government-sponsored enterprises, will act as conservator of the two firms, taking control of the companies’ day-to-day operations. The agency said in a press release that there is “no exact time frame” for when the conservatorship may end, and that the powers of the firms’ stockholders will be suspended until the conservatorship is terminated.
As conservator, the agency said it would be able to take “all actions necessary and appropriate to (1) put the company in a sound and solvent condition, and (2) carry on the company’s business and preserve and conserve the assets and property of the company.”
“Conservatorship will give the enterprises time to restore the balances between safety and soundness and provide affordable housing and stability and liquidity to the mortgage markets,” FHFA Director James Lockhart said.
As part of the takeover, Lockhart said the dividends on Fannie and Freddie’s common and preferred stock will be eliminated, but that the common and preferred shares will remain outstanding. Additionally, subordinated debt interest and principal payments will continue to be made.
Other changes include an immediate suspension of the two firms’ political activities — including all lobbying.
Importantly, Mr. Paulson said Fannie and Freddie will be allowed to modestly increase their mortgage-backed securities portfolios through the end of 2009. Beginning in 2010, however, the portfolios would be gradually reduced at the rate of 10% annually, largely through a run off of the portfolios, “eventually stabilizing at a lower, less risky size.”¶
The takeover also includes the departure of Fannie Chief Executive Daniel Mudd and Freddie Chairman and Chief Executive Richard Syron. The FHFA said TIAA-CREF Chairman Herb Allison will take over as CEO of Fannie, while U.S. Bancorp Chief Executive David Moffett will be CEO at Freddie. Messrs. Mudd and Syron have consented to stay on and help with the transition, and Paulson said he hopes that “the vast majority” of key Fannie and Freddie employees remain will with the firms.
The Treasury said its senior preferred stock purchase agreement includes an upfront $1 billion issuance of senior preferred stock with a 10% coupon from each GSE, quarterly dividend payments, warrants representing an ownership stake of 79.9% in each firm going forward, and a quarterly fee starting in 2010.
The two firms own or guarantee more than $5 trillion of U.S. home loans, about half the total outstanding loans in the country.
The move was made as the companies continue to suffer from the ongoing collapse of the U.S. housing market. The firms have run up combined losses of around $14 billion over the past four quarters and face heavy additional losses as foreclosures are expected to continue to set records.
The longer-run future of the companies will be up to Congress, which created both of them to support the housing market, as well as the next administration.
Treasury Secretary Henry Paulson briefed Sen. Barack Obama, the Democratic presidential nominee, on Friday and spoke on Saturday with Sen. John McCain, the Republican nominee.
In a statement Saturday, Sen. Obama called the situation “extremely serious” and said it affects “our entire economy.” He added: “Any action we take must be focused not on the whims of lobbyists and special interests worried about their bonuses and hourly fees, but on whether it will strengthen our economy and help struggling homeowners.”
Sen. Obama said the rescue also “must protect taxpayers, not bail out the shareholders and management of Fannie Mae and Freddie Mac.”
Alaska Governor Sarah Palin, the Republican nominee for vice president, said during a rally Saturday afternoon in Colorado Springs, Colo., that Fannie and Freddie have “gotten too big and too expensive to the taxpayers.” She added: “A McCain-Palin administration will make them smaller and smarter and more effective for homeowners who need help.”
The plan will also likely face immediate scrutiny from Congress as it returns from a lengthy recess next week.
House Financial Services Committee Chairman Barney Frank (D., Mass.) said he was “pleased” after a conversation he had late Friday with Mr. Paulson about Treasury’s “strong reaffirmation that the vital roles these institutions play in our nation’s housing markets must continue.”
Mr. Frank said he would evaluate any plan by how it protects taxpayers, restores stability to financial markets and ensures the availability of affordable housing.
Speaker of the House Nancy Pelosi (D., Calif.) said she would work “in a bipartisan manner” with Mr. Paulson, other Bush administration officials and congressional leaders to review the plan “to ensure that the interests of taxpayers and the broader economy are protected.”
grim, 536 in mod
update from the WSJ
maybe too long?
for the first time, JM leads BO by 3 points in gallup poll.
http://www.gallup.com/home.aspx
#530
Kettle,
It is clear thinking like that that will prevent you from ever serving in congress or holding a high administration position.
More of our tax dollars well spent “for the children”. Freehold Regional HS District Superintendent gets doctorate degree from unaccredited diploma mill at taxpayer expense. Then the district gives him a raise for the bogus credential. The school, Breyer State, has been kicked out of Alabama, Idaho and the African nation of Liberia.
http://www.app.com/apps/pbcs.dll/article?AID=2008809050408
http://www.app.com/apps/pbcs.dll/article?AID=2008809060313
Grim – 539 in moderation
From above (I am on handheld and can’t see the msg number right now) “Republican nominee for vice president, said during a rally Saturday afternoon in Colorado Springs, Colo., that Fannie and Freddie have gotten too big and too expensive to the taxpayers. She added: A McC-P administration will make them smaller and smarter and more effective for homeowners who need help.”
Yes. YES. YESSSSS!!!!!!!!
Break ’em up and create a bunch of ’em. No single entity should grow to more than 5-10% market share, as they then become too big to fail and, thus, lax.
“smaller and smarter and more effective for homeowners who need help”
She does realize that the GSE’s don’t really directly help homeowners right? Some may even argue indirectly.
I mean, if there was no secondary mortgage market, lenders would have to lend only based on their deposits and other income that contributes to their reserves.
Without the ability to lend out as much money as banks do now, house prices would likely be far below what they are now.
It’s not Freddie and Fannie that caused this mess. As the origination of agency mortgages plummetted and non prime loans picked up, the Fannie and Freddie decided to jump into the subprime game. Or their jump into that market precipitated the drop. 2002 was when they were thinking of getting into subprime and 2003 is when conforming loans dropped.
The problem isn’t with Fannie Mae and Freddie Mac, the problem is with the deregulation and with the federal reserve. Fannie and Freddie were just used to help lighten the load of some of the banks holding bad mortgages. They’re the scapegoat I think. There problems wouldn’t have been as bad if they didn’t buy up all that bad subprime debt in 2007.
More of our tax dollars well spent “for the children”. Freehold Regional HS District Superintendent gets doctorate degree from unaccredited diploma mill at taxpayer expense. Then the district gives him a raise for the bogus credential. The school, Breyer State, has been kicked out of Alabama, Idaho and the African nation of Liberia.
http://www.app.com/apps/pbcs.dll/article?AID=2008809050408
2nd link for above:
http://www.app.com/apps/pbcs.dll/article?AID=2008809060313
Here’s a You Tube of him speaking at the last board meeting. What a class act!
http://www.youtube.com/watch?v=xBW5S-Kz2c8
I do not see how you can deny that Fannie and Freddie were a major cause of the housing bubble. They have injected a massive amount of capital into the mortgage market over the years and have continually lowered standards and increased leverage year by year. It is their presence that is largely responsible for the misperception of MBS as AAA rated securities even as they were issued at the height of the bubble. Moreover, the plan going forward was for these entities to seize an even larger portion of the market and increase their leverage to an even greater degree with the stated purpose of propping up house prices. These entities were a cesspool of mismanagement and reckless leverage and I believe they are case #1 why the federal government should be restrained from attempting to dominate markets
” do not see how you can deny that Fannie and Freddie were a major cause of the housing bubble.”
Major cause I would disagree. Major player, yes.
[542] gator
how corrupt do you have to be to get kicked out of Liberia?
In other news, HOLY SH1T BATMAN!!! I lose connectivity with the world for one day in order to move and the GSEs get seized (makes me wonder if this would have kicked the supports out of the housing market—I doubt it and anticipated price slides, but OMG). Now I am afraid to go to sleep at night.
Hold onto your butts tomorrow in the market, it’s gonna be one wild ride.
Happy Birthday Grim!!!!
Sorry bad housing news had to come with it.
Also, if it is any consolation, I just got to my office.
Shore,
In Goldfinger, she told Bond that she was “immune” to his charms. That line never made sense to me (at my prepubescent age) until I read the book. If you read the original Ian Fleming books, you would find (as I was surprised to find) that Ms. Galore was a lesb1an.
Fleming’s books were actually considered quite scandalous for their time, and very well-selling, making him a combination of Tom Clancy, Danielle Steele with the sales records of Harry Potter’s Rowling.
Welcome back to the online world, Nom. You’ve got a backlog of administration employment applications to read. I’ve got to return to the Island of Sodor.
548 Nom – Pretty corrupt! There’s a board meeting tomorrow night where they are going to discuss the issue. It should be an interesting one. The state has already ordered him to stop using the bogus credential, but it’s still all over the district’s website. I hope my dad attends to give em hell.
Hi, JB. Poking my head in to wish you a very Happy Birthday. 31?
zogby poll also gives mc 4 pts lead. seems this election is moving to right direction.
http://www.zogby.com/news/ReadNews.dbm?ID=1548
bi-
what do you think about the markets tomorrow?
[406] Vic,
“Your new house is in Mclean, VA.”
Sweet, as long as it is inside the beltway. I loved living in McLean.
Ket, that helicopter going past your new house every day at 8:00 isn’t really there (seriously, same damn time every day, the helicopter to Langley—I used to joke that the neighbors would say “what helicopter? you didn’t see any helicopter.” Can’t confirm if it was black since, after all, I never saw it.)
550.
Say hi to Thomas, Toby, James, and Gordon for me.
Maybe Sir Topham Hatt should be our Sec. of Transportation.
kettle1 Says:
September 7th, 2008 at 9:55 am
vic, clott
the idea of repudiating all debt and starting over is probably one of the best options the US has. The catch is that like russia, it would mean the end of our empire while keeping the country intact. no politician and most citizens are not prepared to even consider the end of the american empire. Any real solution to our financial mess will nessacitate the end of the american empire and that is reason #1 we will not see a real solution. As i said before no politician is willing to accept the end of the american empire.
It’s worse than that. ‘Repudiation’ by America will take the form of just opening up the printing presses. Nominally saves face by avoiding an actual default and it doesn’t put the politicians on the spot (95% of the public will have their standard of living destroyed but not comprehend why/how). When the debt hits the fan, buckle up for Weimar hyper-inflation.
Hey, all. OT topic, but should I care after the politics flung around this place over the last few months?
Our laptop got a bug Norton didn’t or wouldn’t fix. I’m not discounting collusion, since initially, this thing looked like an easy fix. It killed speed, POP server pooped out, and Pop-up controls all failed. After many hours of fixing and two blue screens of death, I gave up; our new Dell Studio just arrived.
Does anybody out there know how to fix the crummy sound issue on it? Like you can’t hear anything with the speakers?
“Ms. Galore was a lesb1an”
Well THAT makes the name a whole lot more meaningful.
Was at work all day I see in my absence it just keeps getting better & better. (sarcasm off)
I can tell you one thing for sure, dealing with people all day the public has no clue.
It is going to be a rude awakening.
By the way Grim Happy Birthday! You can still keep counting young blood.
Pouring a Scotch in your honor! AAAH!
Many more my friend.
Grim think we could get some of these guys off their butts for an early Sat at the Rose. Would seem to be a centrally located place. Not to far from BC, Morris ctys or even NYC for that matter. Lost makes it from SI & me from Vernon. Talk is cheap put the keys in the car & GTG gang.
559-
see what i mean lisoosh! you crack me up!
Happy Birthday Grim.
here is why the bailout is going to accelerate price declines (from Bloomberg):
*******
Under the plan, the Treasury will receive $1 billion of senior preferred stock in coming days, with warrants representing ownership stakes of 79.9 percent of Fannie and Freddie. The government will receive annual interest of 10 percent on its stake.
As a condition for the assistance, Fannie and Freddie eventually will have to reduce their holdings of mortgages and securities backed by home loans.
The portfolios “shall not exceed $850 billion as of Dec. 31, 2009, and shall decline by 10 percent per year until it reaches $250 billion,” the Treasury said. Fannie’s portfolio was $758 billion at the end of July, and Freddie’s was $798 billion.
Thanks for painting that piture for me lisoosh!
skep It is a mess, I guess I should be happy that it helps me but what a bunch of a holes. Get ready for 09 folks if you think it’s bad now.
So basically, we are looking at the GSEs combined portfolios being cut roughly in half within 15 months.
Fannie and Freddie were securitizing loans that had less then 20% down-payments like they were going out of style (pun intended).
I would hope that this conservatorship goes back to supporting mortgages that fit the earlier model. As a result, they would be guaranteeing less loans, and a higher down-payment would fall back into fashion (pun intended).
Conservatorship == lower house prices
2009 is going to be an epic bloodbath. there is no one capable of filling the holes the GSEs are going to leave in the market as they reorganize/wind up
Skep 568 Yes, as I said 09 O’boy. Even if it’s half as bad as most here are in line with. I don’t qoute #s much it’s much more about the big picture. If you read in the morn some times I post stuff when I have time (not often) I do my reading & research.
to tell the truth I’m scared sh*tless about the future. Even having made the right moves & sold all my Re in 05 & 06 I worry. We are in deep no doubt, I hope we weather the storm. To many losses to absorb
the US is on the ropes.
(568) skep-tic
“2009 is going to be a bloodbath.”
Congress raised the national debt limit to $10.6 trillion in H.R. 3221 – The Housing and Economic Recovery Act of 2008.
According to the site DeficitsDoMatter, we are already at $9,674,386,450,115. (Of course, that changes right before your eyes.) I think it was Peter Schiff who quipped back in July, “Who says politicians can’t plan ahead.”
Phony and Fraudie:
Let the printing begin. Hyperinflation is on it’s way!
“2009 is going to be a bloodbath” – That will be the most stated phrase next year.
DOW FUTURES UP 228
I hope you libs see what all this negative talk and rumor spreading has done to our nation. Now GM & Ford need some damn money. We really have to go ahead and give it to them. They have too many people working for them for them to fail and suffer just because a bunch of America haters upended the credit markets. These damn haters did not take into account that our treasury is going to counter their actions by helping them (and us) out here.
Let me tell you something, this is the US of damn A and we ain’t going down like some of you want to see.
http://www.msnbc.msn.com/id/26592074
Automakers greet Congress with hands out
As lawmakers return, industry wants $50 billion in loans to retool plants
WASHINGTON – Auto industry allies hope to secure up to $50 billion in government loans this month that would pay to modernize plants and help struggling car makers build more fuel-efficient vehicles.
With Congress returning this coming week from its summer break, the industry plans an aggressive lobbying campaign for the low-interest loans. The situation is growing dire after months of tumbling sales, high gasoline prices and consumers’ abandoning profitable trucks and sport utility vehicles.
Sir Toppam Hat for me, will always be “The Fat Controller”
Grim is offing celebrating his birthday, so my earlier update from the WSJ is still in moderation.
Not to fear, they have a new one posted at 8:20:
U.S. Seizes Mortgage Giants
Government Ousts CEOs of Fannie, Freddie;
Promises Up to $200 Billion in Capital
By JAMES R. HAGERTY, RUTH SIMON and DAMIAN PALETTA
September 8, 2008
In its most dramatic market intervention in years, the U.S. government seized two of the nation’s largest financial companies, taking direct responsibility for firms that provide funding for around three-quarters of new home mortgages.
Treasury Secretary Henry Paulson announced plans Sunday to take control of troubled mortgage giants Fannie Mae and Freddie Mac, replace the companies’ chief executives and provide up to $200 billion in capital to restore the firms to financial health. The Treasury’s plan puts the two companies under a conservatorship, giving management control to their regulator, the Federal Housing Finance Agency, or FHFA. In return for agreeing to provide as much equity capital as needed later to cover losses stemming from mortgage defaults, the Treasury gets $1 billion of preferred stock in each company without providing any immediate cash.
With that, the U.S. mortgage crisis entered a new and uncharted phase, potentially saddling American taxpayers with billions of dollars in losses from home loans made by the private sector. Bush administration officials, backed cautiously by legislators on both sides of the aisle, argued that the cost of doing nothing would be far greater because of the toll on the economy of falling home prices and defaults in the $11 trillion U.S. mortgage market.
Mr. Paulson noted that more than $5 trillion of debt and mortgage-backed securities issued by Fannie and Freddie is owned by central banks and other investors world-wide. “Failure of either of them would cause great turmoil in our financial markets here at home and around the globe,” Mr. Paulson said.
By taking this action, the government has seized control of the vast bulk of the secondary market for home mortgages, where these loans are sold to investors, and will have a more direct responsibility than ever for solving the housing crisis. The intervention also marks the failure of the public-private experiment that was created to boost home ownership among Americans. Though Fannie and Freddie were created by Congress to help prop up the housing market, they have long been owned by private shareholders seeking to maximize profits.
http://online.wsj.com/article/SB122079276849707821.html?mod=hpp_us_whats_news
#572 john: Ho-Hum.
reinvestor101:
You just became 20% less wealthy today. Bailout the automakers and you will be 25%less wealthy. Nice to privatize the gains and socialize the losses if you are the winning side of the deal.
Communism is no way to run a country. I am sure you agree.
You’re a blithering idiot. “Bunch of America haters” … what you really mean is that people wanted to live beyond their lifestyle, and thus, YOU have to bail them out.
how do you feel about that, clown? is that where you want your tax dollars going?
Happy Birthday Grim!
Shhh…don’t tell bipolar…
Many Republicans say they have the greater burden. Arizona Senator McC, 72, is “either tied or behind in every swing state,” says John Weaver, a former top adviser. “It’s an uphill battle, cobbling together 270 electoral votes.”
Republicans face voter dissatisfaction over someone whose name won’t be on the ballot — George W. Bush, a president with approval ratings that are among the lowest in history.
Bush is “the unspoken name in every aspect of the debate,” says Andrew Kohut, director of the Washington-based Pew Research Center.
In Play
McC’s campaign is betting it can keep Florida and Ohio, two states Bush won in 2004, while adding Michigan and Pennsylvania, two states he lost.
In Pennsylvania, Ohio and Michigan, “the group in play is the white working-class voter who had reservations about O but think they have been harmed by the economy,” Kohut says.
http://www.bloomberg.com/apps/news?pid=20601103&sid=aMkg.UvIx23w&refer=us
What the hell are you “laughing all the way” at? You’re just full of mirth over the misfortune of your fellow citizens aren’t you?
Let me tell you something, you liberal dirtbag, I’ve love to wipe that damn smile off your face. There ain’t nothing funny whatsover about this shlt.
I don’t mind my taxes going to keep American companies in business and to keep people employed by them I don’t mind my damn taxes going to support the financial system and to counter the devilment the real estate terrorists had planned. I DO MIND people like Omama trying to steal my damn taxes for some wealth re-distribution scheme and that’s why we going to ensure that Mac kicks that punk’s azz come November 4. I’m not about to pay any damn taxes to see a bunch of people sitting around on the damn government dole while I’m working everyday.
Laughing all the way Says:
September 7th, 2008 at 8:40 pm
You’re a blithering idiot. “Bunch of America haters” … what you really mean is that people wanted to live beyond their lifestyle, and thus, YOU have to bail them out.
how do you feel about that, clown? is that where you want your tax dollars going?
—Happy Birthday Jim..All the best to a fine young gentleman who is certainly “heads-up” above most people of your generation…
There are many wonderful things that one could say about you and your blog. One of these finer atributes is indeed FAIRNESS–But this poster thinks that the most IMPORTANT of all is the way you allow most of us to fully speak our mind in PRINT on your New Jersey Real Estate Report !
Hope you had a fine HAPPY BIRTHDAY
COMMANDERBOB
Lots of fireworks for Grim’s birthday!
From Marketwatch:
Washington Mutual forces CEO out – report
http://www.marketwatch.com/news/story/washington-mutual-forces-ceo-out–/story.aspx?guid=%7B6121A591%2D2954%2D4A69%2D961C%2D022568F5EB4D%7D&dist=hplatest
Guess what? I’m getting sick of your shlt as well. Helping American companies hasn’t got a damn thing to do with communism and I resent you trying to insinuate I’m some damn commie. Let me tell you something, I’m a rock ribbed red blooded American who loves his damn county and don’t you ever forget that.
All Hype Says:
September 7th, 2008 at 8:35 pm
reinvestor101:
You just became 20% less wealthy today. Bailout the automakers and you will be 25%less wealthy. Nice to privatize the gains and socialize the losses if you are the winning side of the deal.
Communism is no way to run a country. I am sure you agree.
Just in under the wire…happy birthday Grim! Many, many thanks for all the tremendous work you have done and continue to do here.
Hope it was a great b-day!
reinvestor, you said:
I’m not about to pay any damn taxes to see a bunch of people sitting around on the damn government dole while I’m working everyday.
Out of curiosity, what do you do?
Lady, are you trying to pull a fast one on me here? Why do you want to know what I do? Why doesn’t it suffice to know that I work?
scribe Says:
September 7th, 2008 at 9:18 pm
reinvestor, you said:
I’m not about to pay any damn taxes to see a bunch of people sitting around on the damn government dole while I’m working everyday.
Out of curiosity, what do you do?
reinvestor101 Says:
September 7th, 2008 at 9:15 pm
Guess what? I’m getting sick of your shlt as well. Helping American companies hasn’t got a damn thing to do with communism and I resent you trying to insinuate I’m some damn commie. Let me tell you something, I’m a rock ribbed red blooded American who loves his damn county and don’t you ever forget that.
____________________________________________
You are the worst communist I have ever read on any blog. Fool yourself Mr. Amerikan but according to my Rebublican family, only communists give out free lunches, which you want. Resent it all you want comrade.
You are so off with your views that you do not even realize that the Phony/Fraudie bailout will make loans harder to get. Home prices will drop dramatically and you will be more underwater.
Reinvestor,
As a context for your commentary.
Inquiring minds want to know.
I’d like to hear BC Bob’s commentary on the bailout.
Maybe Bost is out with Grim, helping him celebrate.
Re,588 hype is right as a right winger on the board I agree you don’t work for it starve.
No more bailouts ,no more hand outs. Well that ain’t happening any time soon no matter who gets in. Hell in hand basket folks, hold on tight.
scribe 590 maybe Gary’s would be more pointive!
“Mr. Paulson noted that more than $5 trillion of debt and mortgage-backed securities issued by Fannie and Freddie is owned by central banks and other investors world-wide.”
Lemme get this straight. Anyone who was even just half paying attention and had a basic understanding of economics knew thaty RE was out of control, it could not be sustained, and a crash would come — and that with the crash lots of overextended folks would get swept away and burried by debt.
Now, the central bankers, and other financial honchos overseas did not have the sense of a fava been and invested in a shure loser and no, when they lose, we are expected to bail them out? Let the losers take their loses. If overseas investers will not invest here, it will be because what we are offering for investment is not worth it. If our industries are attractive and if our government gets its fiscal house in order, we will be a good place to invest and they will; if not, they shouldn’t be investing here inthe first place.
If i chose a stock badly, I suffer. If Clot invests in the wrong apartment building, he suffers. As it should be. Enough bailing out folks who lose on an investment.
Mike,
I’m curious as to how this will impact on the stock market tomorrow morning.
Also, all of the other markets.
It might be a wild & crazy Monday morning.
Guess what? Curiosity killed the damn cat. You better be careful about what you want to know. You may not be able to handle what you come to know.
I’m self employed and run a firm that helps people and small businesses in certain matters. I have an extensive background in a my area of expertise and hold BS and MBA degrees and well as certain licenses and certifications. I have been self employed for 22 years. Prior to becoming self employed, I worked for two major fortune 500 companies and was a professor at a certain university in the metropolitan area.
That’s all I’m going to tell you until you some clean and explain why you’re so curious.
scribe Says:
September 7th, 2008 at 9:32 pm
Reinvestor,
As a context for your commentary.
Inquiring minds want to know.
Holding my SKF into the suckers rally tomorrow
Shore593 From your lips to Gods ears.
Scribe594 Fools will be happy as clams these are the rocket scientist who put us here. (no offense to rocket scientist)
Re 595 Sound like a educated guy, why are you so blind. Mind you I am so right it ain’t even funny & I know better.
Scibe wild is right they will figure it out by closeing.
oops scribe
Shore Looking good for Mc & P , like it makes a dif.
my gosh you are a fool. how dense can you possibly be? you’re not helping anyone, you clown.
cindy (514)-
Try that in any NJ municipality, and you’ll end up having a fiery, tragic one-car “accident”.
3b (528)-
The death spiral will steepen.
lefty (557)-
BC Bob coined a term for it over a year ago:
“Print and repudiate”
#489 Cindy..The leaders of Fannie and Freddie (at least one of them) that are being replaced by the “brains” spoke up many times and did not want to be involved in the “risky” side of things…the good ole gov’t is rewarding them by firing them, and making themselves look like the heros.
Tard (581)-
“I DO MIND people like Omama trying to steal my damn taxes for some wealth re-distribution scheme…”
But it’s ok for all of us to bend over and take it in the rear from Col. Klink? Why?
#526 CF’s posted article: (not that I am in support of the Dems or the Reps at this point) but I find it funny how Sen O’s chief economist would not speak directly as to whether “O” would support a bailout of Fannie and Freddie just last week. He stated they “did not have access to the data” to make that decision. I don’t think they had access this week either…so why support it now? Just curious. All I can say is this mess must be pretty bad…don’t people see the writing on the wall?
scribe (583)-
Goody! I have WaMu in my office’s bank dead pool.
tard (584)-
“I resent you trying to insinuate I’m some damn commie.”
Idiot, you’re not a communist. You’re a fascist.
scribe (594)-
One thing you can count on: tomorrow AM in the markets will be the ultimate amateur night.
Any move made before the dust begins to settle can only be categorized as pure, wild-assed gambling.
And I am an admitted wild-assed gambler.
tard (595)-
That’s the first CV I’ve ever seen that’s phrased as a complete and utter troll.
tard (595)-
Was that post your little way of sending us a coded message that you run Nigerian Letter schemes?
sheep (596)-
Better hold the guardrail with your other hand.
House Hunter Says:
September 7th, 2008 at 11:13 pm
but I find it funny how Sen O’s chief economist would not speak directly as to whether “O” would support a bailout of Fannie and Freddie just last week.
HH: That would be Austan Goolsbee….watch where you step…..
http://www.chicagogsb.edu/faculty/bio.aspx?person_id=406066
http://www.doctorhousingbubble.com/housing-bread-and-circus-foreclosures-employment-bazookas-and-the-worlds-largest-mortgage-bailout/
bingo…”Essentially the U.S. government is making foreign investors happy and part of the crony inner circle happy by doing this. What needs to be done is these 2 enterprises need to be taken over and split up into multiple entities. Foreign investors never had a 100% guarantee even if it was implied. The government now looks to essentially quell any global problems for fear that foreigners will take our credit card away.”
61 CF…oh no is it you?
ha ha
I have more hair though…
too funny
Sure, even. Yeesh, fat fingers, handhelds, and distractions.
Stu’s putting all of our money into the Indian Casinos tonight. So far it’s paid off – 4 deuces dealt in deuces wild super times pay.
He’s my gambling hero.
# 601 “Shore Looking good for Mc & P , like it makes a dif”
I was glad to see that, for what it is worth. Because we have 50 different races, the overall number means little. I would like to see the data on:MO, WI, PA, OH, FL and the other swing states. Once the media start reporting numbers on a state-by-state basis, we, the public, will have a decent idea of what is going on. Until then, the data means little.
Next GTH wil be at Stu and Gator’s Bay Head weekend place.
Happy Birthday, Grimmy! Hope your day was a blast!
We just got home from celebrating my Dad’s birthday… TODAY! He’s a mite bit older than you…
sl
Greetings ya’all! Happy what’s left of your B’Day Grim.
If I was to guess what the market will do tomorrow, I think it will rise about 4 to 5%. Asian markets are all up around 4% this morning there as they see the FRE/FNM bailout as their own Bear Stearns bailout. Many Asian governments are large holders of our debt as well as FNM and FRE preferred shares and have just breathed a large sigh of relief. Unfortunately for the US tax payer, we and mostly our children are screwed once again. What’s new?
I am fortunate that I recently sold off a chunk of some of my short positions. I plan to redeploy at some point over the next couple of days as the glee over the bailout fades and the reality that our economy sucks and is getting suckier returns.
Gold bugs, SKF holders and other shorts might have a rough couple of days. Keep in mind, the DJIA was 1,000 points higher when the government bailed out Bear Stearns. Had they not done so, I’m betting that the market might have dropped 1,000 points or so over the last two weeks in March. The bailout effectively did nothing except hide the fact that the economy is failing. This current bailout will probably have the same impact. The market will probably prosper to the tune of a 1,000 point gain in the next month or so, only to end up another 1,000 points lower than it was on Friday by the end of the year or early next year.
Of course, this is all a complete guess and the complete opposite could very well happen.
I do think the bailout will have almost no impact on credit availability nor will it help housing. It’s just a way to say thank you to our Asian masters and hope they will continue loaning to us now that we have made good on our earlier promises. Paulson should be hung by his nut sack.
I bet the VIX hits 30 this week. I think it was 24 on Friday. The market tomorrow is probably going to be bumpier than my flight out on Saturday evening.
No weekend place, but I did manage to turn $120 into $2,500! Huzzah beyatches. My reward to myself? A bowl of Skyline Chili followed up by 2 York Peppermint Patties.
Crazy thing. Indiana takes 3% of your win on a hand pay for state taxes. If I knew that prior to going, I might not have gone.
Funny, CF’s take on the bailout matched mine.
627
Stu,
Skyline Diner chilli? We eat there all the time
Looks like Reinvestor is Internet Tough Guy, for a living.
Skyline Chili yet another reason why Cincinnati does not suck!
Where in the hell is the new damn discussion string? It’s damn near 8:00 am and it ain’t here.
Tell you what Grim, no more birthdays for you. You’ve shown that you don’t know how to act.
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Hi Folks!
That’s me again.
This time we will learn how to use the Bootrec.exe tool in the Windows Recovery Environment to troubleshoot and restore often startup issues in Windows Vista.
INTRODUCTION
You can use the Bootrec.exe utility in the Windows Recovery Environment (Windows RE) to troubleshoot and fix the following items in Windows Vista:
-Master boot record (MBR)
-Boot sector
-Boot Configuration Data (BCD) store
Note: When you are troubleshooting startup mistakes by using the Windows RE, you should first try the Startup Repair option in the System Recovery Options dialog window.
If the Startup Repair option does not fix the error, or if you must troubleshoot more steps by hand, use the Bootrec.exe utility.
MORE INFO
To run the Bootrec.exe tool, you must launch Windows RE. To do this, follow these steps:
1.Put the Windows Vista installation disc in the disc drive, and then start the computer.
2.Press a key when you are prompted.
3.Select a language, a time, a currency, a keyboard or an input method, and then click Next.
4.Hit Repair your computer.
5.Hit the OS that you want to restore, and then hit Next.
6.In the System Recovery Options dialog box, click Command Prompt.
7.Type Bootrec.exe, and then hit ENTER.
Good luck with your Windows Vista, since with this OS your still need it.
Cheers,
Carl